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Text / Tan Xiaohan
Source: Alphabet
Ali’s local life handed over the latest transcript.
According to Ali’s latest financial report, as of the end of March 2022, the annual active consumers of the life service sector reached 376 million, a net increase of 64 million year-on-year, and revenue increased by 29% year-on-year. Among them, Ele.me has made outstanding contributions, the average order amount has continued to increase, GMV has grown steadily, unit economic benefits have continued to improve year-on-year, and operational efficiency has been further improved.
This is considered some kind of healthy positive momentum. Ali local life is taking off. At this time, it has been nearly 10 months since Yu Yongfu took over the business.
Not long ago, on May 10th, the monitor Yu Yongfu sent another internal email to all staff, sharing his summary of the past period and future competition: about addition and subtraction, what has been done in local life; facing the future, the source of power what is it?
“Focus on capacity building and firm value creation”, in Yu Yongfu’s view, during this period, Ali Local Life “made clear and firm choices in business, discussed the design of decision-making mechanisms, started to build a learning and precipitation efficiency system, and continued A pragmatic solution to bugs has made significant progress in both business quality and business scale.”
In December last year, Yu Yongfu gave a core judgment of the class committee in the first internal full-staff email: local life is a protracted battle, a boxing match that has just begun. The process is destined to be long and cruel. You can’t KO your opponent, you can only fight for points.
Previously, in this “boxing match”, Ali’s local life was undoubtedly the one who was beaten more. Since Ele.me was acquired by Ali in 2018 and integrated with Koubei as a local life company, it has been overwhelmed by Meituan. In the eyes of some people, this is a hot potato.
Yu Yongfu is not afraid of hot. Ali has a saying: to integrate, look for Yongfu. From an investor to an entrepreneur, from UC to AutoNavi, from Youtu to Lingxi Mutual Entertainment, Yu Yongfu has successively taken over several new businesses, fully demonstrating his integration capabilities.
More than half a year after he took office, Zhang Yong, chairman of the board of directors of Ali Group, once commented on the local life team: “The spirit and the joint effort are completely different.”
Cruyff, the godfather of football, once said that playing football is very simple, but it is difficult to play simple football. The same is true of management. Facing a large organization, how to make things simple may be the biggest challenge for managers.
People close to Yu Yongfu commented, “Every time he takes over a new business, he will spend a period of time and conduct in-depth research and thinking, and then give a strategic judgment of his own, and then resolutely implement it for a long time.”
After taking over the local life, Yu Yongfu gave the strategic direction for the next three years in the first internal email to all employees – focusing on “four horizontals and four verticals”: the four horizontals are business assets, namely elm super APP, instant business flow Supercomputing platform, real-time logistics super-network, and real-time logistics super-computing platform; the four verticals are operational capability building, which are command and combat efficiency system, test efficiency system, evaluation and incentive efficiency system, and learning precipitation efficiency system.
Organizationally, the “Go Home” centered on Ele.me is parallel to the “Go To Destination” centered on Gaode; ideologically, he requires everything to return to creating value for customers, “solve a problem every day… confused Solve bugs!”
With external strong enemies waiting, the market hesitates to wait and see, and various problems remain to be solved. It seems that the new situation Yu Yongfu is facing is much more complicated than in the past. As the disadvantaged party in the boxing match, Yu Yongfu not only had to stalemate, but also had to punch more than his opponent in the stalemate.
In the eyes of many industry observers, as an entrepreneur who likes to be a “driver”, a reformer with excellent integration ability, and a boxer who believes in long-termism, Yu Yongfu and the local life under his leadership are focusing on strategy, business and Organizational ability, consolidate value, and continue to accumulate energy.
1
Yu Yongfu started his career as an investor, but he likes to be a driver in his heart.
For the two roles of entrepreneurs and investors, Yu Yongfu once compared them to drivers and co-pilots. The common point is to look up at the road and think about the direction of development. The difference is that investors can choose a car, take the Alto or take the car. Audi, the entrepreneur has no choice, he has to drive whatever car he gets in; but the investor also has a disadvantage, the steering wheel is not in his hands.
Caijing once reported that in 2006, there was hardly a penny in UC’s account, but Yu Yongfu agreed to join it almost without hesitation. What he considers is that in the next ten years, China will not lack investors, but entrepreneurs. “The two founders of the company, one in charge of technology and the other in charge of products, are unwilling to be the top leader and CEO. On the first day when Yu Yongfu became the CEO, he dared to set the table and build a team to guide the company in the key Time to transform.”
During the UC period, Yu Yongfu rated himself as an optimistic conservative. “I believe that companies that survive for a long time are companies that think far ahead and deploy early.” At that time, there were several confidential project teams running in parallel within UC. However, Yu Yongfu also believes that it is impossible for a company to spread without limit. In 2011, in addition to the secret project U3 kernel group, he “hold down” several product lines, “the results are still good.”
In June 2014, Ali acquired UC. As the chairman of UC, Yu Yongfu also joined Ali. A month later, Yu Yongfu was ordered to integrate Gaode. Prior to this, Ali’s integration of non-e-commerce businesses was rarely successful.
According to Lieyun.com, at AutoNavi, Yu Yongfu had to not only integrate, but also help him transform from traditional map services to the Internet. He described the state of Gaode at the time. Everyone was determined to change, but it was a mess, and it was “very dangerous” to change in the south, south, and northwest.
Yu Yongfu, who often calls himself a science and engineering man, has a simple, direct and sharp style of work. In the first executive meeting after taking over AutoNavi, he opened it bluntly: “I am free of wealth, and I don’t need to prove my rank. I do AutoNavi because of my love for this product. I have no other motivation.”
Yu Yongfu did not disappoint Ali. He decisively focused on map services and led AutoNavi on the right track. At that time, AutoNavi’s daily life was less than 10 million. According to Ali’s financial report, as of April 2021, AutoNavi’s mobile monthly active users exceeded 599 million. , the monthly daily life exceeded 100 million.
After everyone accomplishes something, there is a huge inner challenge involved – rest? Do something like that again? Or do something bigger? Yu Yongfu has also experienced such moments.
“Eighty or ninety percent of people choose the first path, and I respect those who choose the second path. In fact, this is really a bloodbath. You have to know that after ten years in a company, there is a strong Fatigue. You’re 90% likely to ruin your reputation because you choose this path.”
Yu Yongfu insisted on choosing the third way to take over the local life, which may be a “bigger thing” for the “driver” Yu Yongfu to do.
2
When Yu Yongfu took over, Ali’s local life also faced the initial problems of AutoNavi – it was not the first in the industry, there was a gap with competitors, and it was not Ali’s dominant field.
In the past year, the industry has experienced unprecedented changes: Douyin and Xiaohongshu have stepped into local life, Pinduoduo and Meituan have overweight community group purchases. In February this year, the industry environment was also changing: 14 departments including the National Development and Reform Commission issued a joint notice on guiding the reduction of “merchant commissions”.
A conclusion that has gradually become a consensus in the industry is that, for the industry and the market, the mode of seizing shares and obtaining pricing power through huge subsidies, thereby monetizing commissions, can no longer continue in the current environment.
Therefore, some analysts believe that this means that “traffic thinking” has become outdated, and local life no longer believes in “quick victory theory”. In other words, this is also a period of strategic opportunity for industry competition mode switching.
Yu Yongfu shared his thoughts on the finality and value of local life: this is a right industry, the main track of the Internet, and an industry that is on the rise; Getting better.
Some observers believe that all industries in local life will soon enter the stage of improving production efficiency with digital capabilities. In addition to transactions, marketing and other links, digitalization will fully enter the whole process of research and development, production, operation, and industrial chain.
This means that the local life platform will no longer only undertake the functions of information display and matching, but will further create new value with its digital capabilities, which is a broader competition field.
According to a report by “Lady”, a former Alibaba executive believes that if Yu Yongfu can devote himself fully, “there is a drama in this matter.” He explained that local life should be a game of chess. A well-integrated team should play steadily and not rush to make superficial comments. In the process, there must be the entrepreneurial spirit of poor children who are good at leveraging.
Yu Yongfu, known as the “Master of Integration”, just matched it. Regardless of the entrepreneurial period or after taking over the management of Ali’s business, Yu Yongfu has the experience of quickly adjusting the business and organizational structure and focusing on core products.
Behind the rise of UC in the early years, there were two important decisions: first, to do subtraction – stop the project that UC was doing technology development for China Mobile at that time, that is, sell the enterprise market, put all energy into the personal market, and give up the Saipan system; second It is integration – integrating Jiuyou, PP assistant and multiple channels and tool companies into UC.
Lei Jun evaluated this as “Liu Bei-style management”: good at integrating business, good at uniting capable colleagues to form a strong entrepreneurial team.
After entering Ali, Yu Yongfu’s most frequently mentioned titles are the president of Ali Mobile Business Group and the chairman of Ali Entertainment. The two businesses he was responsible for have in common that they also involve external acquisitions. , also need to re-order the complex relationship between the acquired business and the growing internal incubation program.
After taking charge of the local life sector, Yu Yongfu’s management ideas have been consistent. A local person said that one of Yu Yongfu’s main jobs is to answer “what not to do, why not do it”, and the principle of decision-making is based on long-term value.
Subsequent news shows that Ele.me has postponed the promotion of the enterprise meal ordering business, which is to make the business and organization more focused; at the same time, the word-of-mouth business has been reduced, and the life service Saas platform Keruyun will further clarify the open positioning of the industrial Internet. Be more agile to market demands.
Local life is synchronized with the bottom-level reform of the team. Yu Yongfu believes that the most common type of scale model organization is “all kinds of slow”, so it is clear that “organization is agile”.
According to media reports, at the end of last year, Ali local life began to implement the “L-shaped organization” and umbrella structure. The “L-shaped organization” is that each business is vertically erected on a functional middle stage, that is, the vertical line of the “L” is business, and the horizontal line is the shareable functions such as market, finance, and legal affairs, and the purpose is to make decisions quickly.
3
Even with rich experience, taking over local life is still a challenge for Yu Yongfu.
After Meituan acquired Dianping in 2015, it formed a composite capability of “going to the store + home”. Ele.me has faced the dilemma of single-line combat for a long time.
How to combine Ele.me’s “home service” and AutoNavi’s “destination service” to challenge Yu Yongfu’s integration skills; for Ele.me itself, how to continuously accumulate “points” in the “protracted war” more urgent.
The construction of local life business is not a one-day achievement, and it is difficult for Ele.me to catch up with the market share of Meituan in a short period of time. However, the various actions of Ele.me since then show that the business is quietly changing.
One of the actions that has not been taken seriously by the public is the launch of an AI dish analysis system “Hungry Xiaowei” that helps merchants develop new products. This project has conducted internal tests with several brands in 41 cities. This AI product launched the top-selling single product on the entire platform during the Laba Festival last year. In response to the food safety issue that users are most concerned about, the Ele.me “Sunshine Kitchen” project has realized the real-time live broadcast of the merchant’s kitchen on the APP.
According to the above-mentioned local life insiders, Yu Yongfu’s view is that the essence of the business will not change, but the situation of realizing the business, and the more original the demand, the stronger. What Eleme has to do is to go beyond the single delivery track, aim at the digitalization of the industry, and focus on the underlying transformation of value.
“Who is my customer, what is the first demand, and how can I meet the customer’s first demand.” Striving for customer value has become one of Ele.me’s internal code of conduct, Yu Yongfu made it clear, “I encourage everyone to raise their hands, I need What’s the place to unlock productivity, what I think is going to be subtracted at the moment.”
“This is similar to what Amazon calls Day 1.” The insider said that Day 1 needs to maintain continuous curiosity, flexibility and practice, which requires avoiding the Day 2 situation that will occur in some leading companies: decision-making slows down, the company is getting more and more Focus on and away from customers, shifting the focus to internal challenges rather than external customer-centric innovation.
To become a more heavyweight company, it is necessary to ensure the Day1 mentality and corresponding pragmatic mechanisms. For local life, Day 1 starts at number one.
“For important innovations and important problems, the number one must solve them himself. Innovation is absolutely top-down. You have experience, resources, and influence, but you can’t do it. Why ask others to do it? ?” Yu Yongfu said internally.
According to reports, since the end of last year, Ele.me will have a live broadcast of “evening self-study” every Thursday night. The theme of the live broadcast is “find bugs and solve bugs”.
Inside Ele.me, from toilet posters to elevator videos, many mistakes and omissions in products and experiences have been brought up one after another, and they are outspoken. The live broadcast every Thursday night is to invite the heads of different projects to focus on “solving bugs”. “In front of everyone, either solve the problem on the spot, or set a flag, when can it be solved, and how to solve it.”
Yu Yongfu said in his internal letter: “Looking up at the stars, we have to keep our feet on the ground in the end. The easiest way is to focus on ‘discovering and solving problems’. We can solve one every day, and we can solve more than 1,000 small problems in three years. , users and merchants will feel much better, and the quality and efficiency of business operations will improve a lot.”
Previously, Ele.me’s “Blue Knight Smart Helmet” and “Smart Double-sided Cabinet” also won the “Cranberry Award” from Ali Group, which is the first time that Ele.me has won this award since Alibaba’s acquisition.
In addition to capacity building, under this round of Shanghai epidemic, Ele.me launched a series of innovative measures focusing on user value and social value, which have also become agile and pragmatic footnotes – at the end of March, Ele.me urgently launched “emergency special needs” Services to help solve the most urgent needs of vulnerable groups such as the elderly living alone, pregnant women, infants, and the disabled. The follow-up of other platforms is basically a week later.
Subsequently, “emergency special needs” continued to iterate and innovate, and launched a series of special cars; Ele.me’s supply guarantee measures, including community group purchases, all-round supermarkets, etc., also made every effort to cover quickly; Ele.me also launched a variety of new models to guarantee supply. For drug delivery, according to Shanghai media reports, the daily service capacity has risen to 100,000 orders in a short period of time.
By the end of May, with Shanghai’s phased resumption of business and market resumption, Ele.me is the first to launch the “Resonance Plan” for the merchant market. The four major measures are multi-pronged. There are not only short-term urgent measures for merchants to restart, but also long-term digital transformation. support.
The results are reported in the latest financial report: local life services have become the fastest quarterly growth segment within the Ali Group. Ele.me’s transaction volume has grown steadily, and a number of key indicators have grown healthily, completing the “submission” of the entire fiscal year.
Under the leadership of Yu Yongfu, Ali local life started a healthy development momentum. However, in the context of competition, this boxing match is not closed. Now, Douyin (and Kuaishou) have begun to play with great fanfare. The local life field has changed from a confrontation between two strong players to a multi-party competition, and the situation is even more confusing. This is both a challenge and an opportunity for Ali’s local life.
If it is said that Yu Yongfu has “closed his fist” with Ali’s local life in the past ten months, when will their right hand be hit?
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