Let "Lao Gan Ma" Know Your Taste: Big Data Promotes Transformation of Real Economy in Guizhou

Updated: July 25, 2019 Source: Belt and Road Portal
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Accelerating the further integration of big data and the real economy is the overarching theme for the development of big data in Guizhou to enter the 2.0 era. For the real economy, in the world of digitizing everything today, how to enable the transformation and upgrading with "Big Data+" to further tap data dividends and value may be a real proposition.

For the real economy, where is the value of big data?

Since chickens today are, to a large part, bred at scale, most of them travel no more than 3 meters from birth to death, along with a very short growth cycle. Although there is no problem with such chicken in terms of edible safety, their meat quality is greatly reduced and taste is significantly worsened.

To this end, JD.COM has launched a Running Chicken programme as a method of poverty alleviation, which provides loans to state-level poor households every year for each household to breed about 100 baby chicks. But, these households should follow the requirements that the chicks must roam without being fenced in and can climb up the slopes and freely drink dew and eat insects in the field. According to the rules made by JD.COM, it can buy back the adult chickens at three times the local price only if they would have run more than one million steps.

But how free range can be ensured for chickens? JD.COM's solution is to monitor the step counts through chicken foot rings. At the same time, the running chickens can also be supplied with seasonal fruits and vegetables three times a week, which is monitored in real time in every chicken house.

Chicken raised in general feeding farms are priced at dozens of yuan, but the running chickens can be sold for up to 188 yuan on the JD.COM platform, basically with 5 to 8 times the value to be released.

"Digitalization is crucial to us. If we only adopt traditional methods such as feeding stuff and additives, there would not have been such huge rewards. This is a very simple but vivid example to tell the difference between the digital economy and the traditional economy," said Shan Zhiguang. This is the amplification and superposition effect of digitalization on the economy. The digital economy is not a virtual economy, but a new real economy that is the result from the integration with the real economy. But among this, the most important thing is to truly incorporate "Big Data+" into the traditional businesses of the enterprise so as to transform their traditional capital- and manpower-driven methods. He believes the digital transformation will bring amazing effect to traditional enterprises and enable backward countries or regions to accelerate development.

In the impression of the outside world, "Lao Gan Ma" is a traditional enterprise. With its chili sauce, it has become a global craze from China to overseas, with the market coverage of over 96% and the market share of over 65%.

In 2016, "Lao Gan Ma" invested nearly 7 million yuan to customize an operational big data monitoring platform, revolutionizing its traditional management mode. "Lao Gan Ma" since then has come a long way from management to marketing.

Which flavor of oil chili is most popular with consumers? What kind of oil chili do consumers in all regions prefer? On the large monitoring screen of the "Lao Gan Ma" big data platform, data and graphical analytics presented in real time are quite clear, based on which, "Lao Gan Ma" can adjust the production and launch structure to achieve precise marketing.

If the fact that natural disasters occur in the origin of raw materials is monitored, the big data platform will timely provide early warning for judging whether the price of raw materials in this area will go up. In doing this, the company can start the emergency response mechanism in the first place and purchase raw materials from the alternative areas in advance. Otherwise, the cost will rise correspondingly if the procurement occurs at the very time when the price is climbing.

Due to the connection of various barriers, a variety of real-time data gathers to the big data platform to play the role as the "strongest brain."

Data shows that the operational big data supervision platform has created cost savings by 15%-20% for "Lao Gan Ma." At the same time, with the "Big Data+", the annual output value of "Lao Gan Ma" increased from 4 billion yuan in 2015 to 5 billion yuan in 2017, with an average annual growth rate of 11.8%.

Last year, Guizhou Province launched the "Integration of Ten Thousand Enterprises" campaign to boost the transformation and upgrading of traditional enterprises with "Big Data+".

During the period from 2018 to 2022, Guizhou will build 100 integration benchmark projects and implement 1,000 integration demonstration projects on a yearly basis. Thanks to these projects, 5,000 real economy enterprises will be deeply integrated with big data, 20,000 real economy enterprises will utilize cloud services for integration, and the added value of the digital economy will account for 30% of Guizhou province's GDP by 2020. And, more than 10,000 real economy enterprises will see deep integration with big data, and the added value of the digital economy will represent 33% of the province's GDP by 2022. Such projects will also guide and facilitate the integration and upgrading of real economy enterprises in various fields and industries with full coverage.

Over the past year, Guizhou Province has achieved remarkable results in the deep integration of big data and the real economy. Data shows that in 2018, Guizhou Province built 102 benchmark projects and 1,050 demonstration projects, pushed 1,625 enterprises towards integration, and guided 10,124 enterprises to use cloud. The fusion of big data with the industry, agriculture, service industry and others in an innovative way has enabled the whole province to see improved quality and increased efficiency in economic development. Last year, the contribution of big data to economic growth exceeded more than 20%. The "Integration of Ten Thousand Enterprises" campaign has seen a good beginning, exemplified by the deep integration level index of big data and the real economy across the province at 36.9, up by 3.1 from 2017. It is moving from the initial stage of integration to the intermediate stage at an accelerated pace.

Editor: 曹家宁