Exclusive Interview with Xin Hua——Digitalization Drives "Long-Term Value", Breaking Through and Laying Out the Local Life Service Industry

In the digital age, the local life services industry is undergoing a profound transformation. The rapid changes in consumer behavior and the deep integration of online and offline channels have not only brought new challenges to merchants but also unleashed unprecedented growth potential.

With the popularization of mobile internet and social media, e-commerce and short video platforms have rapidly risen and won market share. Traditional offline merchants, however, face declining customer traffic and rising costs, urgently needing to find new growth paths. At the same time, the impact of the three-year pandemic has further exacerbated the uncertainty in the entire industry.

Crises often contain new opportunities, and more and more traditional merchants are realizing the urgency of digital transformation. They are re-examining their business models and beginning to look for new growth points.
 

However, the path to transformation is not smooth. Although merchants are gradually realizing the potential of digital tools and platform marketing, faced with complex and changing platform rules and fierce market competition, especially small and medium-sized merchants, they often find it difficult to familiarize themselves with the rules of various platforms, let alone quickly master operational methods. At the same time, the numerous service providers emerging in the market vary in quality, and some opportunistic players use merchants' desire for traffic to design short-term profit-making but unsustainable strategies, further increasing the merchants' risk exposure.

In response to this, Xin Hua, General Manager of Zhonqi Beauty and Zhonqi Performance, pointed out: "The industry urgently needs result-oriented solutions that can truly solve the long-term growth needs of merchants, helping them achieve sustainable development in digital transformation while avoiding traffic traps."

Based on this industry insight, Zhonqi Beauty and Zhonqi Performance have launched a series of digital omnichannel operation solutions centered on long-term value. Through the two major SaaS tool platforms, "Smart Store System" and "Smart Marketing System," these digital tools integrate multi-platform data and, through data-driven and AI empowerment, collect and analyze data in the marketing chain in real time, accurately understanding industry attributes. The use of feedback mechanisms further helps merchants optimize marketing strategies, improve marketing efficiency, reduce customer acquisition costs, and enhance customer lifetime value.

"We want to be more than just providers of digital tools; we want to be trusted partners who help our clients grow their businesses and build core competitiveness for merchants in the new competitive environment." Xin Hua said in an interview.

In this issue of "Zhonqi Spokesperson: Discussing Digital Growth," we specially invited General Manager Xin Hua to talk about:

Zhonqi Editor: When did you join Zhonqi Group? As a senior professional with nearly 20 years of experience in internet marketing, how do you think this experience has helped you in your work at the Group?

Xin Hua: I joined the Zhonqi family in 2021, then serving as CEO of Zhonqi Chenxing. Before joining Zhonqi Group, I worked in the advertising business teams of Tencent, Alibaba, and JD.com, responsible for marketing product operations, accumulating nearly 20 years of experience in internet marketing strategy design and operations. Joining Zhonqi was my first foray into the industry SaaS field. In the past three years, I have deeply studied the business model of SaaS industry customer success and, combining the thinking of internet user operations, enabled Zhonqi Chenxing's business to advance instead of retreating during the pandemic, forging a path different from that of industry peers.

Zhonqi Editor: What strategic considerations are behind the Group's decision to establish Zhonqi Beauty and Zhonqi Performance at this stage? In your opinion, what is the significance of deepening into the local life service sector at this time for the Group's development?

Xin Hua: The impact of the pandemic on the local life service industry has been enormous, with many on-site service merchants suffering fatal blows. But crises always bring new opportunities. The pandemic made many traditionally minded merchant operators aware of the importance of online business. At the same time, in recent years, new media platforms such as Douyin and Xiaohongshu have successively deployed local life services, and coupled with the rapid development of AI technology, merchants have ushered in the most important change in their operating methods since the "Hundred Regiments War."

Against this backdrop, based on Zhonqi Chenxing's successful experience in the cinema industry, the Group decided to further penetrate the local life service sector, choosing the performance and beauty industries as breakthroughs. We hope to provide merchants with innovative business solutions through digital empowerment, helping them seize the opportunity of this transformation and achieve new growth and breakthroughs. For the Group, this not only helps to promote the diversified development of the Group's business and explore new increments but also allows it to play a leading role in industry transformation, creating more value for merchants and consumers.

Zhonqi Editor: What difficulties have you and your team encountered in leading the new business? How do you encourage your team to continue exploring and breaking through in uncertainty?

Xin Hua: Every industry has its deep traditions and complex ecosystem, and every merchant has unique business philosophies and service models. To provide truly suitable digital solutions for the industry, simply collecting needs and developing a few tool-type products is far from enough.

Our team is mainly composed of members from the internet and SaaS industries, and the biggest challenge lies in the differences in cross-industry thinking. Whether we can start from the perspective of industry operators and dig out the underlying business logic through the surface industry pain points is a prerequisite for the success of the solution.

Based on this, I often emphasize to the team that we must maintain an empty-cup mentality, and on the basis of respecting the traditional industry model, truly understand the essence of the industry through continuous learning and abstract generalization. Only then can we combine new technologies and new ideas to propose practical solutions and productize them.

In the face of uncertainty, I encourage the team to regard difficulties as opportunities for growth and to review and iterate from each attempt. At the same time, by clarifying goals, sharing phased achievements, and continuously enhancing the team's professional capabilities, we allow everyone to find confidence and a sense of accomplishment in exploration. This process of shared growth has not only solved the problems we encountered in serving customers but also made the team more cohesive and innovative.

Zhonqi Editor: What is your perspective on the current market environment and development trends in the beauty industry? Driven by both digital transformation and consumer upgrades, how have the core needs of beauty companies changed?

Xin Hua: The target customer group of Zhongqi Beauty is mainly beauty service providers, which constitute the largest number of businesses in the beauty industry, serving the widest range of customers, but with relatively small business scales. According to industry statistics, the number of beauty service providers exceeds 1 million, with a compound annual growth rate of over 5%, but the annual revenue of single stores is generally less than one million yuan.

In the past platform e-commerce era, beauty businesses mainly relied on improving platform rankings to acquire customer traffic. However, many successful cases have emerged in the past two years. Some brands have leveraged the interest recommendation algorithms of new media e-commerce platforms to accurately target their customer groups with differentiated marketing, rapidly expanding to thousands of stores and achieving online transaction volume (GMV) exceeding 100 million yuan. This kind of achievement typically takes several or even ten years to achieve in the traditional platform e-commerce era.

Currently, with the popularization of big data and diversified marketing tools, combined with operational methods that suit the characteristics of businesses, businesses have the opportunity to break through the ceiling of their existing businesses. However, this also places higher demands on operators. In the past, they only needed to focus on optimizing service experience and relying on platform-driven customer flow; now, they need to master the characteristics of content dissemination on new media platforms and design and produce content based on platform characteristics and target audience preferences, which significantly increases their operational threshold.

In addition, some opportunistic service providers are using businesses' desire for new forms of traffic to design many short-term profit-making but unsustainable schemes, further increasing the risks for businesses. Therefore, the industry urgently needs effect-oriented solutions that truly meet the long-term growth needs of businesses to help them achieve sustainable development in digital transformation and avoid traffic traps.

Zhonqi Editor: From your observations, what are the differences in the approaches of different e-commerce platforms in the beauty industry? Considering the characteristics of the beauty industry, which e-commerce platform do you think has relatively greater growth potential at present?

Xin Hua: Currently, valuable online traffic entry points for businesses are mainly divided into three categories: shelf e-commerce platforms represented by Meituan Dianping, interest e-commerce platforms represented by Douyin and Xiaohongshu, and private domain tools represented by official accounts and service accounts. Different platforms have different dissemination methods and content media.

For example, Meituan Dianping mainly improves rankings through sales volume and high ratings, suitable for marketing methods that emphasize promotions and user reputation; Douyin uses short videos to showcase product characteristics to stimulate consumer desire, suitable for quickly attracting attention and creative promotion; Xiaohongshu is more suitable for highlighting product quality through graphic and textual content planting.

For different businesses, choosing the right platform and developing targeted marketing strategies is key. Based on brand positioning and target audience characteristics, businesses need to implement different dissemination strategies on different platforms. Therefore, there is no absolutely superior platform; the platform suitable for the business itself is the best.

Zhonqi Editor: When choosing an e-commerce platform, what key factors should beauty companies of different scales prioritize? What specific suggestions do you have for small businesses with limited resources that cannot implement omni-channel deployment for the time being?

Xin Hua: As mentioned earlier, beauty companies of different scales need to first thoroughly understand the characteristics of the platform when choosing an e-commerce platform, and then develop dissemination strategies based on their own strengths.

For large chain brands , they usually have dedicated operations teams that can achieve omni-channel coverage and continuous traffic generation, so they need to consider more the budget allocation logic, product pricing strategy, and content production efficiency to improve ROI 。

For small and medium-sized brands, especially single stores , once a certain scale of new customers arrives, their service capacity will reach its upper limit, so they can consider adopting a phased public domain traffic generation + private domain precipitation approach, using a distribution system for returning customer marketing. 。

Zhonqi Editor: In the face of numerous service providers on the market claiming to provide "omni-channel operation solutions," what is Zhongqi Beauty's unique competitive advantage?

Xin Hua: Service providers on the current market can be roughly divided into two categories:

One category is service providers that mainly provide SaaS-based industry tools. These tools usually have comprehensive and extensive functions designed to meet the needs of a wide range of customers, but for small and medium-sized businesses, most functions are redundant, the user experience is cumbersome, and even less efficient than traditional business methods.

Another category is service providers that provide certain specialized services, such as platform operators. In order to reduce their operating costs, they often do not fully consider the business characteristics of businesses, but apply a set of common dissemination methods to all businesses in the same industry or even across industries. Moreover, in order to pursue short-term transaction results, they usually insist on businesses using low-price strategies. This not only fails to accurately reach target customers but may also damage the brand image of businesses due to excessive consumption of service capabilities and price reductions.

Zhongqi Beauty's unique competitive advantage lies in providing truly intelligent omni-channel operation solutions that meet the business needs of businesses, starting from their long-term value needs.

Zhongqi Beauty uses the "Smart Store System" and "Smart Marketing System" as the SaaS base, and designs a set of flexible tools for different business needs. Through simple configuration, different roles in the store can use their own terminal devices to focus on and handle only the work content related to themselves.

For small and medium-sized businesses lacking deep operational capabilities, we intelligently decompose needs through the service provider platform, personalize the distribution of tasks to service provider teams with different execution advantages, and monitor the subsequent conversion effects through the smart store system to evaluate the long-term value of the service provider's work content, ensuring that businesses' investment can obtain continuous returns.

Zhonqi Editor: Next, let's talk about Zhongqi Performance. What important changes and trends have you observed in the performance industry in recent years? And what are the positive effects of digital technology?

Xin Hua: In my opinion, the biggest change is the increasingly prominent role of new media platforms in the performance industry.

First of all, the performance industry has an innate advantage in content production and is very suitable for building influence through new media platforms. In recent years, many high-quality IPs have achieved great box office success through the dissemination of high-quality content on new media platforms. For example, the dance dramas "Only This Green" and "Dream Back to the Red Chamber" have been viewed hundreds of millions of times on the official accounts of their creators on Douyin, attracting a large number of netizens to create a large amount of secondary content, further boosting popularity and driving box office revenue as high as hundreds of millions of yuan. At the same time, some performing arts groups have also tried to build personal influence and build their own private traffic bases through online live broadcasts by the creators.

Secondly, the algorithm recommendations of new media platforms have also enabled niche art forms to have the ability to conduct targeted dissemination, bringing new vitality. For example, traditional performing arts forms such as Qinqiang opera, Yueju opera, and Suzhou Pingtan have broken through geographical limitations and begun to attract new audiences nationwide.

Finally, the continuous upgrading of new media platforms in terms of consumption conversion strategies and tools has led to users' habits gradually shifting towards new media platforms. Although consumers currently still use traditional shelf e-commerce platforms as their main consumption channels, the advantage of these platforms as the primary traffic entry point is changing. In this process, if performing arts companies want to continuously improve IP influence, expand their private traffic pool, and tailor unique marketing strategies for private domain users, they cannot do without the use of digital tools and the support of professional service providers.

Zhonqi Editor: As a new subsidiary of Sinochem Group, what is the current business layout and development status of Sinochem Performing Arts? What are some of the interim achievements that can be shared?

Xin Hua: The performing arts industry covers multiple sub-sectors, such as concerts, music festivals, song and dance dramas, stand-up comedy, traditional performing arts, and cultural and tourism performances. Each sub-sector has different operating models and sales channels. The commonality is that they usually rely on shelf platforms as their main sales channels. However, the long tail part is limited by its own IP influence and operational capabilities, and mainstream platforms can often only fill less than 20% of the seating capacity.

As a newcomer to the industry, Sinochem Performing Arts, based on its improved ticketing SAAS basic products, focuses on small theaters and new performing arts spaces, providing merchants with an intelligent marketing system that integrates new media platforms such as Douyin, Xiaohongshu, Kuaishou, and WeChat. This system can help small and medium-sized merchants build their own bases on the platform, design personalized marketing strategies, and publish customized marketing content. Currently, our product is in the trial operation stage, and it has already successfully helped 3 seed customers achieve an interim achievement of a 40% increase in overall seating capacity.

Zhonqi Editor: In the face of the different rules and gameplay of platforms such as Xiaohongshu, WeChat, and Douyin, how does Sinochem Performing Arts integrate into these platform ecosystems to empower performing arts companies and create greater value?

Xin Hua: Currently, the openness of major platforms to local life merchants is different, and the rules are also rapidly adjusting and changing. The operational tools provided to merchants are also extremely complex. According to our research, although practitioners in the performing arts industry have gradually recognized the marketing value of these platforms, it is difficult for them to quickly become familiar with the rules of each platform, let alone master the operational methods.

Sinochem Performing Arts adheres to the value of "customer success is my success," starting from the needs of merchants. We not only want to be a provider of digital tools, but also a trustworthy partner to help customers grow their business. Therefore, we carefully select and train traffic service providers, integrating service providers that can truly bring practical conversion effects into the Sinochem Performing Arts service provider platform, helping merchants solve operational and promotional problems on various platforms. Through our self-built intelligent marketing system, we collect data from the marketing chain, precipitate and analyze industry attributes, and use feedback mechanisms to help service providers and merchants optimize marketing strategies and improve ROI.

Zhonqi Editor: When operating on multiple traffic platforms, companies often face the problems of dispersed resources and rule adaptation. How does Sinochem Performing Arts help customers achieve synergy between platforms and avoid operational silos?

Xin Hua: For local life merchants, especially small and medium-sized merchants, it is indeed difficult to meet their customer acquisition needs through a single platform. To address this issue, Sinochem Performing Arts provides merchants with solutions at two levels:

First, at the tool level, we provide a complete ticketing SAAS system that integrates multiple mainstream platforms, providing performing arts companies with unified ticket warehouse management, centralized distribution of marketing content, and data integration and analysis capabilities, helping merchants achieve efficient collaboration across multiple platforms.

Secondly, at the operational level, for performing arts companies with weaker operational capabilities, we provide them with the most suitable content producers and traffic service providers through the service provider platform. Performing arts companies only need to publish their promotional needs, and the platform will complete the entire process from publishing, matching, material production and placement, effect collection, and profit sharing settlement, ensuring that their collaborative operations across platforms are no longer a problem.

Zhonqi Editor: In the current market dominated by large-traffic performances, how can niche performances use digital strategies to find their target audience? Does Sinochem Performing Arts have related services to support these niche markets?

Xin Hua: On traditional shelf e-commerce platforms, niche performances are indeed difficult to compete with large-traffic, large-IP performances for audiences. However, in the ecosystem of new media platforms, niche performances can fully utilize the platform's recommendation algorithms to accurately target their customers. Moreover, since content platforms are more suitable for the dissemination of refined clips, niche performances can also use AI content production tools for efficient editing and distribution, and use Sinochem Performing Arts' intelligent marketing system for omnidirectional publicity.

For example, last June, we helped a Peking opera-themed drama with digital publicity, and its playback volume eventually reached 20 times that of the performing arts company's agency operator during the same period, while the cost was only 25% of the agency fee. This shows that Sinochem Performing Arts' intelligent marketing system can significantly improve the exposure of niche performances, reduce publicity costs, help performing arts companies accurately reach their target audience, and improve the return on investment.

The following is a fun interactive session, where we have collected questions that everyone was interested in from the last session~

Zhonqi Editor: If you weren't the general manager of Sinochem Beauty and Sinochem Performing Arts, what profession would you most like to try? Is there any industry or role that has always excited you?

Xin Hua: To be honest, I've always wanted to be a craftsman, more accurately, a woodworking craftsman. Starting from a piece of raw wood, through design, modification, carving, and polishing, transforming it into a completely different form. This not only requires a deep understanding of the material properties, but also requires exquisite design and rigorous craftsmanship, every step is full of challenges and a sense of accomplishment. I hope to realize this dream after retirement. Of course, before that, I will use our products to cultivate my mentality first (laughs).

Zhonqi Editor: The names Sinochem Performing Arts and Sinochem Beauty are relatively common. If you were to rename them, how would you design a more distinctive name?

Xin Hua: As newcomers, Zhongqi Performance and Zhongqi Beauty mainly target a wide range of traditional industry professionals. The naming format of "brand logo + industry attribute" helps them understand and remember more directly. Perhaps in the future, when we have a more significant influence in the industry, we can consider a more individual and profound name. I also look forward to that day coming soon!

Zhonqi Editor: Finally, can you express your expectations for the team in one sentence?

Xin Hua: Approach the industry with reverence, learn from it with humility, and help it with altruism.