Highlights of GenBridge 2023 AGM

In early September, the “GenBridge Capital 2023 AGM” was held in Shenzhen. At a time when the consumer market is gradually rebounding, we brought together global investors and founders of portfoilos to discuss and share experiences in consumer investment and entrepreneurship.

The market has fluctuated in the past few years, and due to the pandemic, it had been four years since we last met many overseas LPs in person. Although the looming shadow of the pandemic has long dissipated, LPs still had questions about the Chinese consumer market: Is the consumer industry still a promising high-growth sector in China? Is there still room for growth in the industry when consumers are generally tightening their belts?… Addressing the concerns of investors, GenBridge’s management team elaborated on various aspects such as the mission and positioning of the fund, investment strategy, post-investment empowerment, and investment performance during the morning AGM:

GenBridge Capital remains firmly focused on consumer investment during its growth phase: We aim to become the best consumer fund in China, empowering the new generation of “consumer champions.”
Chinese consumer companies remain the ideal investment allocation for global investors: GenBridge Capital’s unique dual investment themes: the new generation of “national brands” and the new generation of “national chains,” not only capture the structural growth opportunities of the Chinese consumer market but also identify sustainable, long-term investment value that transcends cycles.
Following these two major investment themes, GenBridge Capital has invested in and supported numerous outstanding representative Chinese consumer companies such as Harvest, Yeswood, Qiandama, Guoquan, and Xueji. These enterprises, with their inherent high-quality growth and continuously solidified profitability, have served the vast majority of Chinese consumers’ needs and achieved robust performance growth, truly weathering market cycles.
As for exits, we are gradually entering a “harvesting period”: Despite challenges in the capital market this year, three excellent consumer companies have successfully listed on the A-share and HKSE, further bolstering our confidence in delivering attractive returns to LPs.

During discussions with entrepreneurs, LPs gained a deeper understanding of the myriad challenges consumer startups face and how they continuously evolve and improve amidst these challenges. The robust growth momentum maintained by GenBridge’s portfoilos further strengthened LPs’ confidence in the vitality of China’s consumer economy and affirmed our unwavering commitment to deepening our roots in the consumer sector.

In the afternoon’s sharing session, we invited 15 founders from GenBridge’s portfoilos to share and discuss their entrepreneurial journeys. Founder and managing partner of GenBridge, Robert Chang, delivered the keynote speech titled “Realizing the dream of consumer champion together along the way”:

The Chinese consumer market still possesses strong growth drivers: At the inception of GenBridge Capital, we recognized a generational opportunity in the consumer market. Over time, China’s entrepreneurs and its vast 900 million consumer base have created ample space for the growth of the new generation of consumer champions.
“Good products” are the starting point for the new generation of consumer champions: “Good products” drive supply chains, multi-channel sales, excellent experiences, and strong branding. The key to crafting these good products lies in enhancing performance while ensuring affordability.
A good company needs to consolidate its leading advantages and build moats: GenBridge aims to help companies with leading advantages in their respective sectors to enhance their core competencies, solidify their competitive edges, and ultimately establish protective barriers, continuously striving for excellence.
Downturns are not daunting; even Japan, with its “lost three decades,” still managed to produce numerous consumer champions: Consumers consistently seek better quality essentials, greater convenience and value for money.

In the roundtable discussions, managing director of GenBridge, George Wan, founding partner Victor Zhang and Robert Chang, engaged with portfolios’ founders on topics including “new generation national brands,” “neighborhood chain stores,” and “new lifestyle chain stores.” Entrepreneurs shared their initial motivations, company positioning, and decision-making processes in response to market changes.

In the “new generation national brands” discussion, founders discussed the unchanging essence of national brands amidst market fluctuations. While the market constantly evolves, creating products that meet consumer needs requires continuous efforts in consumer insights, supply chain refinement, and team organization.

In the “neighborhood chain stores” discussion, founders shared emerging opportunities they observed at the consumer end. Cross-regional chain enterprises must promptly and keenly serve consumers’ rapidly changing needs, such as affordability, freshness, and value propositions, capturing opportunities for continuous breakout products based on these changes.

In the “new lifestyle chain stores” discussion, founders shared innovative practices tailored to the unique experiences desired by the new generation of consumers. Whether upgrading classic products or creating differentiated innovations, the ultimate goal is to seamlessly integrate into consumers’ lives and become a daily staple.

Throughout the discussions with entrepreneurs, we deeply resonated with three sentiments: the power of focus, the friendship of time, and the spirit of progress.

On the second day, we held closed-door sessions focusing on strategic management and operational analysis for founders, introducing practical enterprise management tools like the “Three-Step Strategic Management.“ GenBridge Capital’s Executive Director, Bruce Yang, stated that growing companies often face three core issues: strategy, operations, and organization. For instance, strategic challenges might include unclear vision and conflicting objectives, lack of strategic focus and inappropriate timing, or insufficient decision-making frameworks and process management tools.

In such scenarios, it becomes imperative to establish a simple, effective, and executable strategic management system to help founders seamlessly transition from strategy planning to execution, moving from a people-dependent approach to a more systematic one. Drawing insights from companies like Huawei and JD.com, and the typical need of growth-stage companies, we simplified strategic management into three steps: conducting effective strategy sessions, leveraging strategy houses, and establishing a PMO. We believe GenBridge’s “Three-Step Strategic Management” will serve as a potent tool for founders to ground their strategies effectively.

Products and services are the best testament to a consumer company’s prowess. In Shenzhen, we visited three portfolio stores together with LPs: Xueji, HIMO, and M Stand, experiencing firsthand the meticulous craftsmanship and customer-centric approach of our portfoilo companies.

The event also served as a showcase for our portfoilos’ products, offering attendees an immersive experience with an array of flagship products.

From its inception, GenBridge Capital set its mission to empower the new generation of Chinese consumer champions. As we mark our seventh year in 2023, our original vision remains unchanged. We aspire to bridge global LPs’ expertise and capital to China, passing it on to the nation’s most promising consumer entrepreneurs, creating greater value. We firmly believe that with the relentless efforts and innovations of outstanding entrepreneurs, China’s consumer sector will remain a fertile ground for growth, injecting continuous vigor into the nation’s economy.

We extend our heartfelt gratitude to our closest partners for their unwavering trust and support in GenBridge Capital.