震坤行陈龙2023年内部信：聚焦客户价值的创造

This article is an internal letter released in 2023 by Chen Long, Chairman and CEO of ZKH Industrial Supply. It discloses the company's operating performance in 2022 and outlines its core development directions for 2023. Key takeaways are as follows:

1. Core achievements in 2022: ZKH has established partnerships with over 60,000 manufacturing clients, covering 70% of China's top 1,000 manufacturing companies. Its total tax payment doubled, and it was officially recognized as a Shanghai-based trading enterprise headquarters, delivering steady growth amid a highly uncertain market environment.

2. Three core priorities for 2023: First, the entire company will focus on creating customer value, with strengthening supply capacity as the core task. It will optimize its performance philosophy around customer value to help clients reduce overall procurement costs. Second, it will build a lean and agile organization, optimize employee productivity, cut valueless expenditures, redirect resources to customer value-creating projects, and revitalize team motivation. Third, it will roll out the Hanjia Excellence System across the company, tie tool proficiency to promotion, and open the system to partners to collectively improve professional capabilities.

This article discloses the latest strategy of ZKH Industrial Supply, a leading player in the industrial supplies service sector, which provides valuable insights for brand owners operating in the industrial space. Key takeaways are as follows:

1. Industry market overview: By 2022, ZKH had partnered with over 60,000 manufacturing clients, covering 70% of China's top 1,000 manufacturing companies. This indicates strong market demand for B2B industrial supplies services, and leading platforms have already achieved high customer penetration. Partnering with top-tier platforms can bring brands a steady stream of business opportunities.

2. Guidance for product strategy: ZKH's core priority for 2023 is to strengthen its supply capacity and seek strategic partners that share its vision, with requirements for reliable product quality and competitive pricing. Brands can align their product development with this direction, deepen cooperation with the platform, and jointly create value for end customers.

3. Insights for internal management: Brands can learn from ZKH's approach to optimize management around customer value, build a lean organization, cut unnecessary non-value-adding expenditures, continuously improve digital and professional capabilities, and achieve long-term growth based on customer reputation.

This internal letter reveals the latest development direction of the industrial supplies service sector, with clear opportunity signals and operational guidance for sellers active in the industrial space. Key takeaways are as follows:

1. Market growth opportunities: The manufacturing sector currently has strong demand for professional industrial procurement services. As a leading platform, ZKH has accumulated over 60,000 manufacturing clients (covering 70% of China's top 1,000 manufacturers) with abundant high-quality customer resources. Sellers can tap into this customer base and drive business growth by forming in-depth strategic cooperation with ZKH.

2. Guidance for operational adjustment: All of ZKH's 2023 operations are centered on creating customer value, which requires sellers to match the real needs of clients with reliable, competitively priced products. Sellers need to adjust their product and supply chain strategies to gain recognition from both the platform and end customers.

3. Risk warning: With high external market uncertainty, sellers should avoid overly aggressive overinvestment, manage growth pace, optimize internal management, cut unnecessary expenditures, focus on customer value-creating businesses, and improve their own risk resilience.

This internal letter clarifies market demand for manufacturing factories serving the industrial sector and offers reference experience for digital operations. Key takeaways are as follows:

1. Product design and manufacturing requirements: Downstream customers in the industrial supplies sector currently prioritize reliable product quality and competitive pricing, alongside lower direct procurement and management costs. Factories should optimize product competitiveness around these core requirements in their production and design processes.

2. Business cooperation opportunities: ZKH will focus on strengthening supply capacity in 2023 and open its in-house Hanjia Excellence System to upstream and downstream partners. Factories can form strategic cooperation with ZKH to access ZKH's 60,000+ manufacturing clients (especially top 1,000 manufacturers) and unlock greater order growth.

3. Insights for digital operations: Factories can learn from ZKH's development philosophy to advance organizational leanness, continuously improve digital capabilities, adopt systematic operation tools to optimize internal processes, embed a culture of continuous lean improvement into the organization, reduce internal waste, and boost production and operation efficiency.

This article discloses the latest strategy of ZKH Industrial Supply, a leading industrial supplies service provider, which delivers valuable industry insights for B2B service providers in the industrial sector. Key takeaways are as follows:

1. Industry development trend: After the pandemic, the industrial supplies service industry has shifted its focus from scale expansion to long-term value creation. Leading companies have all positioned customer value creation as their core strategy, and industry competition has shifted from fighting for traffic to competing on value. Going forward, only service providers that can continuously deliver cost reduction and efficiency improvement for customers will survive and grow.

2. Core customer pain points: Currently, the core pain point for manufacturing clients is opaque, inefficient industrial procurement processes and high overall procurement costs. Clients need better product alignment and more optimized supply chain solutions, which represent core opportunities for service providers.

3. Reference solution: ZKH has developed the Hanjia Excellence System (HES) to systematically improve the professional capabilities of all employees and optimize operation processes. It also opens this tool to upstream and downstream partners to drive collective growth, while boosting productivity by building a lean organization and cutting non-value-adding expenditures. This solution can serve as a direct reference for peer service providers.

As a benchmark industrial supplies service platform, ZKH's latest strategy offers high reference value for the operation and development of peer platforms. Key takeaways are as follows:

1. Core development direction for platforms: Manufacturing clients have strong demand for transparent, efficient, and low-cost industrial procurement services. Platforms should position customer value creation as the core of all operations. Only by earning customer trust and a strong reputation can platforms achieve long-term, certain growth, which is the core survival logic for platforms amid uncertain environments.

2. Reference operational practices for platforms: First, optimize performance management around customer value to incentivize all teams to proactively study customer demand and deliver customer value. Second, build a lean and agile organization, optimize person-job matching to improve productivity, cut valueless expenditures, and concentrate resources on core projects. Third, develop systematic operation tools, tie tool proficiency to promotion to improve overall professional capabilities, and open tools to partners to build a win-win ecosystem.

3. Risk mitigation guidance: Facing uncertain market conditions, platforms should avoid overly aggressive overinvestment, manage growth pace, maintain a constant sense of urgency across the team, and avoid risks brought by blind expansion.

This is a 2023 internal letter from the founder of ZKH Industrial Supply, a leader in China's industrial MRO industry, revealing the latest development trends of China's industrial supplies service sector and offering high research value for industry researchers. Key insights are as follows:

1. New industry development trends: After three years of the pandemic, China's leading industrial service enterprises have adjusted their development strategies, shifting from past scale expansion to long-term development focused on core value. They no longer pursue short-term numerical indicators, but instead prioritize long-term, certain growth. The overall industry has shifted from traffic competition to customer value competition, which is a clear signal that the industry is entering a mature development stage.

2. Innovation practices of industry leaders: ZKH has formed a complete business system centered on customer value creation, supported by a management model of lean organization and operations via the Hanjia Excellence System. It also proposes opening its internal operation tools to upstream and downstream partners to build a value co-creation industrial ecosystem, which is a vivid case of new business models in the industrial service sector.

3. New issues facing the industry: With growing external market uncertainty, industry players generally face post-pandemic issues including declining team motivation, high operating costs, and difficulties in managing investment pace. ZKH's response plan provides a real research sample for studying the transformation of industrial enterprises amid an uncertain environment.