By Chen Qiyu, Co-President of Fosun International

 “1+N” ecosystem is the key to build up Fosun industrial groups. Through Fosun’s “Investment + Industrial Operation” strategic plan, Fosun sustainably enhances operational capabilities, generates synergies, and consolidates multiple industrial groups into Fosun’s ecosystem.

The cornerstone of the industrial group is Fosun’s outstanding products. Each team should create a mechanism to develop their products. This mechanism becomes the driving force to lead the team to plan a corporate strategy every decade, develop a strategic plan every year, make adjustments every quarter, conduct business analysis every month, and address strategic initiatives every day. Ultimately, the team will be able to foresee industry trends, and consolidate industrial groups with good products. You can refer to these excellent company examples that we are familiar with:

Founded in 1976, Apple Inc. now has a product line covering hardware and operational system. IPod, MacBook, iPhone, iPad and other products formed the ecosystem that created the Apple empire. Johnson & Johnson was established in 1886, and has become the leader in global medical industry relying on product lines cross consumer, pharmaceutical and medical devices.

Benchmarking top-notch companies or industrial groups, similarities can be found. Those companies or industrial groups can be categorized into three types: R&D-driven, marketing-driven and integration-driven.

1. R&D-driven: Top R&D team and the management team will dedicate themselves to guarantee the best result of the product. It needs sufficient R&D funding to be capable of designing a leading product line, and to predict the future market in five to ten years.

2. Marketing-driven: Marketing capabilities is the root cause of the success. For instance, Pfizer acquired product lines through several M&A, and then achieved higher revenue with turnover through re-marketing of the existing and newly added brands. This requires a fabulous marketing strategy and a leading BD team, which is one of the most important departments in an organization.

3. Integration-driven: a company has top integration capability to complete M&A, promote integration, save cost and create synergy value quickly. This process requires strong industrial layout planning and trading capability. Integration-driven companies should know when and what to buy and to sell. In addition, it also has strong capability in terms of efficiency improvement and capital operation.

Fosun’s healthcare sector has launched many products and has become a competitive industrial group since its establishment. It covers products across diagnosis, pharmaceuticals, medical device, medical services, senior care, consumer products, health insurance, and baby care, while also making capital operations.

The key to solve problems in healthcare industry is with products. We leverage innovative technologies to meet unmet needs and create new needs. When we consider treating a new disease and providing our customers with healthcare, we learn about the illness, determine the right technology, think about methods to acquire new technologies, and lead the process with a qualified team.

We emphasize teamwork in fighting the most important field in healthcare – product development. It requires the collaboration of different teams including R&D and BD. Meanwhile, we attract top talents globally from the product team to the marketing team by developing an incentive management system. We also pay attention to online and offline retail, direct sale and channel marketing including B2B, B2C, and through key influencers. There might be a loss or low-profit period during incubation period, but we keep our focus on healthy ROE with long-term input.

We put our focus on technology development during the venture capital stage. In addition to R&D, we look for world-leading technology through GMV joint ventures, introduce top products through business development, realize value through an excellent supply chain, improve manufacturing and marketing capacity to form a comprehensive service covering drug marketing, service retail, online and offline medical clinics, insurance payment, and healthcare service management. We find full-channel marketing integration, technology-driven and mid-office support are the key structure to build such an ecosystem.

Fosun United Health Insurance has launched series of products including a plan integrated with healthcare services – “United Family Healthcare”; a plan based on the understanding of medical data – “Breast Cancer Insurance”; and a plan bundled with medical product – “Medicine + Insurance”.

Let’s work together to build up a solid cornerstone of industrial groups by establishing the “1+N” ecosystem.