Interview with Xiao Shiguo of Shanghai Cotton Union: AI Deep Cultivation, Not Chasing Trends; Data Boundaries, Steady Progress; Adhering to Long-termism

[Ebrun Original] Since its inception, Shanghai Cotton Union has steadfastly adhered to its core development mission: deeply rooting in the entire cotton industry chain and building a digital industrial service platform. As a leading domestic industrial internet platform focused on the cotton and textile commodity sector, Cotton Union leverages diverse shareholder resources and over a decade of deep industry expertise and exploration. It has carved out a pragmatic and steady development path in digitalization, AI application, data element operation, and global expansion. Recently, we interviewed Xiao Shiguo, CEO of Shanghai Cotton Union, to gain an in-depth understanding of the platform's practices, insights, and strategic positioning within the industrial internet wave.

Ebrun Think Tank: First, could you introduce the situation of Cotton Union's industrial internet platform and how it serves upstream and downstream enterprises? Where do you see the opportunities in industrial internet?

Xiao Shiguo: Cotton Union is a domestic industrial internet platform dedicated to the entire cotton and textile industry chain. Headquartered in the Wusong Innovation City, Baoshan District—a hub for industrial internet in Shanghai—the company has long been rooted in the digital transformation of the textile industry. With cumulative transaction volume exceeding 80 billion yuan, it provides comprehensive digital supply chain management services to tens of thousands of enterprises involved in cotton planting, processing, trading, textile manufacturing, and apparel. These services include industrial e-commerce solutions, textile supply chain cloud management, and industrial internet technical support.

In terms of service system, Cotton Union achieves full industrial chain coverage: providing integrated solutions such as online transactions, warehousing & logistics, data & information, flexible supply, credit & quality assurance, production capacity matching, and supply chain management for clients including cotton farmers, ginning mills, traders, and textile enterprises. This effectively addresses pain points at every stage of the chain.

Regarding opportunities in industrial internet, we believe they are concentrated in three core directions: First, the textile and apparel industry boasts a market size of trillions of yuan, yet the digital penetration rate still has enormous room for growth. Second, AI technology and data elements can profoundly reshape industry pricing logic and risk management, enhancing overall operational efficiency. Third, the global shift of textile production capacity brings incremental cross-border business opportunities. Coupled with policy directions like green & low-carbon and data elements, this opens new growth spaces for the platform.

Simultaneously, we maintain a rational judgment: the cotton industry has unique agricultural product constraints. With annual production exceeding 7 million tons, terminal output value in the hundreds of billions, and composite transaction scale around 300 billion yuan, there is a natural market ceiling. We do not blindly pursue transaction scale expansion but focus on the value of production-oriented services, deepening and refining industrial digital transformation and efficiency enhancement.

Ebrun Think Tank: Since 2025, how have large AI models and Agent technologies been deeply applied in various aspects of your platform? What quantifiable efficiency or decision-making improvements have they brought?

Xiao Shiguo: We have long tracked AI technology development, committed to practical application, and always adhered to pragmatic principles, avoiding blind pursuit of tech trends. New technology investments are precisely aligned with actual business needs, with efficiency improvement as the core, strictly implementing cost control. We cautiously invest in unverified new models while boldly experimenting.

Currently, AI technology is deeply integrated into diverse business scenarios on the platform, including resource management, transaction matching, fund control, market analysis, risk management, customer management, real-time information delivery, logistics scheduling, document preparation, and order tracking. This has yielded quantifiable results:

· Intelligent Quoting: Supplier quoting time reduced from 30 minutes to 1 minute, efficiency improved 30-fold.

· Intelligent Resource Push: Achieves precise supply-demand matching, average transaction cycle shortened from 3 days to 1 day.

· Intelligent Risk Control: Business review time compressed from 4 hours to within 15 minutes, enabling real-time AI tracking and processing of orders throughout the entire process, significantly reducing error rates.

· Applications like AI Customer Service, Intelligent Logistics Scheduling, and Intelligent Document Generation have also been implemented, effectively lowering operational costs and comprehensively enhancing overall platform efficiency.

We have also experimented with AI Agent applications. By aggregating customer daily communication data, extracting high-value industry information, and incorporating it into the platform database, we achieve precise information push. B2B industrial internet, unlike consumer-facing businesses, lacks high-traffic, explosive characteristics but excels in stability and sustainability. This aligns with the development pace we insist on.

Ebrun Think Tank: Does your platform have new initiatives in building vertical large models, 'high-quality industrial datasets,' or 'industrial knowledge bases'? How do you address challenges in data standards and governance?

Xiao Shiguo: We are initiating preparatory work for training the textile vertical 'Cotton Union Intelligent Textile Large Model,' gradually constructing high-quality datasets and industry knowledge bases covering the entire cotton, chemical fiber, and yarn industry chains. Data dimensions encompass core business aspects like transactions, quality, logistics, risk control, supply-demand, pricing, and inventory.

Regarding data governance, the industry's biggest pain points lie in data standardization and information sensitivity. The cotton industry holds significant influence in the national economy, with high data confidentiality requirements, necessitating extreme prudence in public disclosure. Therefore, we will attempt to establish a unified industry data standard on the platform, implement a full lifecycle data management system, and explore secure data sharing through privacy computing technologies. Currently, related technologies and business scenarios are in the preliminary research and validation phase. Upon technological maturity and business closure, we will open exclusive AI tools and value-added data services to industrial chain clients.

Ebrun Think Tank: Industrial internet platforms are categorized as 'Data Element Circulation and Utilization Service Platforms.' How does your platform leverage its trading platform advantages in data collection, governance, rights confirmation, trading, and secure circulation? What business model innovations exist?

Xiao Shiguo: Data elements are a current industry hotspot, but practical implementation still faces many challenges. Currently, local data management departments are being established, and related project advancement is urgent. However, the cotton industry's data sensitivity is high; many enterprises are extremely cautious about supplier information, operational data, resource quantities, quality data, etc.

Simultaneously, data rights confirmation is the biggest current obstacle—transaction and operational data on the platform belong to the clients, not the platform's assets. The platform only plays the role of information publisher and transaction facilitator, making it difficult to overstep and touch client data rights. Therefore, we are currently not participating in initiatives like the Shanghai Data Exchange or various data competitions.

Under compliance premises, leveraging real transaction scenarios, we focus on exploring four types of data service business models: First, launching data subscription services like market indices and supply chain analysis reports, regularly publishing industry research findings to provide decision support for industrial chain enterprises. Second, providing risk control and credit data services to financial institutions. Enterprises can obtain pure credit lines based on platform data credit, achieving faster approval and lower financing costs. Third, creating upstream-downstream data collaboration services. Through professional cotton blending management, we help textile enterprises stabilize product quality and optimize resource allocation. Fourth, building supply chain financing services based on data-enhanced credit. By integrating clients' historical transaction data to construct credit assessment models, we enable fast and efficient credit granting.

In the future, we plan to apply for data element-related pilot projects, prepare to establish a textile industry data trading zone, and promote data services as a new growth engine for the platform.

Ebrun Think Tank: Facing the sensitivity of multi-party data sharing and the lack of incentive mechanisms within the industrial chain, how does your platform build a trustworthy, sustainable data collaboration ecosystem? Have you conducted related activities in building trusted data spaces?

Xiao Shiguo: We actively explore technological paths like privacy computing and federated learning to achieve 'data usability without visibility,' technically ensuring enterprise data security and privacy. Concurrently, we are planning the construction of a platform data center. In the future, it will connect core industrial chain enterprises and financial institutions to achieve secure cross-entity data collaboration. In 2026, we plan to apply for Shanghai's Digital Economy and Data Element special projects to further optimize technical solutions and operational mechanisms, improving the textile industry data ecosystem.

Ebrun Think Tank: Since 2025, has your platform made new market expansions or model innovations in overseas business or 'platform globalization'? Are there key layouts in regions like Southeast Asia, the Middle East, or Latin America?

Xiao Shiguo: Globalization is one of Cotton Union's core strategic directions for the future. We have conducted field research in countries like Vietnam, Cambodia, and India to deeply understand the overseas textile industry landscape. Our overseas strategy closely follows the trend of textile production capacity relocation, focusing on emerging Southeast Asian markets. We plan to establish localized service systems in countries like Vietnam and Indonesia, steadily increasing cross-border transaction volume.

The Southeast Asian market is currently in a rapid development stage with favorable GDP growth and prominent cost advantages. Moreover, the local textile industry chain is relatively fragmented, with no monopoly formed yet, providing a solid foundation for industrial internet implementation and vast development space.

Ebrun Think Tank: Facing challenges like geopolitics, localized operations, and cross-border compliance when going global, what key adjustments has your platform made?

Xiao Shiguo: Going global for an industrial platform is no easy task. While China's textile supply chain is mature, industry competition is fierce, with intense rivalry in transactions, financing, logistics, etc., keeping various costs high. Especially, the capital cost for supply chain services is highly competitive, posing severe challenges to sustained profitability of related businesses. Since the 2018 trade friction, industries have scaled back, entering a phase of steady operation, with high-quality development becoming the strategic priority for enterprises. Against this backdrop, an overseas strategy becomes an inevitable choice for our development path.

Facing multiple challenges of going global, we have formulated targeted response strategies: adopting an organizational structure of 'Headquarters + Regional Centers + Local Companies,' forming localized operation teams blending Chinese and foreign talent, establishing a dedicated compliance department, strictly adapting to local trade policies, foreign exchange management, data compliance requirements, ensuring stable and efficient cross-border operations.

Ebrun Think Tank: Regarding vertical integration of industry and trade, and horizontal integration of technology, finance, logistics for deep value chain mining, what notable progress has your platform made? Have new service models been formed?

Xiao Shiguo: Cotton Union has won the Ebrun Qianfeng Award for four consecutive years. In 2025, it was upgraded from the 'Digital Supply Chain' category to the 'Deep Value Chain' award, which is industry recognition of our business upgrade and value innovation.

Vertically, we have integrated the entire industry chain from cotton planting (contract farming), ginning, to spinning, promoting contract farming and production capacity sharing models, achieving coordinated development of industry and trade integration. Horizontally, we integrate resources from financing, logistics, quality inspection, digital collaboration, etc., creating a full-link, one-stop industrial service system.

Building on this, we have innovatively launched new models like 'Textile Supply Chain Cloud Management' hosting services, enterprise collective procurement alliances, and production capacity pre-sales. These help downstream enterprises reduce procurement costs, improve equipment utilization rates, and decrease inventory backlog, while being supported by efficient and convenient supply chain financing, effectively reducing costs and increasing efficiency for industrial chain enterprises.

Ebrun Think Tank: Does the platform have substantive explorations in promoting green supply chains, low-carbon circulation, circular economy? Are ESG evaluation efforts being conducted?

Xiao Shiguo: Guided by the national 'Dual Carbon' goals, we actively lay out green industry chains, promoting measures like green warehousing, shifting from road to rail transport, and textile waste recycling, helping the industrial chain reduce carbon emissions and water resource consumption. Through green product market premium mechanisms, we help enterprises break through export green trade barriers and more easily obtain green financing support.

In the future, we plan to establish a textile industry ESG rating system, complete ESG credit evaluations for industrial chain enterprises, and jointly release an ESG white paper with authoritative industry institutions, driving high-quality green supply chain development with data.

Ebrun Think Tank: Considering the direction of the '15th Five-Year Plan,' how does your platform understand the strategic positioning of industrial internet in the new era? What are the key development strategies for the platform in the next three years?

Xiao Shiguo: During the '15th Five-Year Plan' period, Cotton Union will establish three strategic positions: a globally leading textile digital supply chain platform, a textile data element operator, and a cross-border textile B2B infrastructure service provider. We hope that through our efforts, the Cotton Union platform becomes the core foundation for textile industry digitalization and a key carrier for data element operation.

In the next three years, the platform's development strategy will focus on four core directions: First, comprehensively reconstructing business efficiency and cost structure with AI. AI is not merely an add-on concept but the core engine driving platform technological innovation and efficiency upgrade, deeply penetrating all business aspects like intelligent quoting, risk control, market prediction, and logistics scheduling. Second, building a trusted data space, expanding and strengthening data derivative services. While strictly adhering to compliance bottom lines, promote secure data flow, value addition, and commercial monetization. Third, achieving scaled breakthroughs in global business. Closely follow the trend of global textile production capacity relocation, steadily advance overseas layouts. Fourth, deepening full value chain service capabilities. Extend from transaction facilitation to supply chain finance, warehousing & logistics, green & low-carbon fields, creating a comprehensive, full-link industrial service system.

Ebrun Think Tank: Does your company have recent financing or IPO plans, and what support do you hope to gain from the capital market?

Xiao Shiguo: The company has completed multiple rounds of financing. The shareholder structure includes state-owned capital and Hong Kong-listed companies. Currently, operating cash flow is ample, and the financial condition is stable. Alongside steady growth in business scale and profits, we are initiating preparations for the Series C financing round.

The platform's long-term goal is to achieve an independent IPO, planning to start IPO preparations around 2028, prioritizing listing on the ChiNext board of the A-share market. We hope to leverage the financial support, brand empowerment, and ecosystem resources of the capital market, joining hands with partners across the industrial chain to contribute Cotton Union's strength to the development of the textile industrial internet.

Conclusion: Adhering to Long-termism, Deeply Cultivating Industrial Value

At the end of the interview, a statement by Xiao Shiguo encapsulates Cotton Union's consistent business philosophy: 'We always control costs based on actual business needs, strictly managing internal investments, firmly maintaining external boundaries, cautiously exploring new concepts and technologies, while boldly experimenting.'

This unpretentious statement, though not flashy, accurately interprets the pragmatic persistence of an industrial internet veteran in an era of conceptual hype and shifting trends. When tech fervor subsides and the market becomes rational, those who can traverse industry cycles are always enterprises deeply rooted in the industry, continuously creating real value for customers.

Not chasing trends, guarding boundaries, seeking progress amidst stability, and cultivating meticulously—Cotton Union's industrial internet story is being solidly written and steadily advanced in every link of the cotton and textile industry chain.

Ebrun Think Tank will continue to monitor the development of industrial internet platforms and the enhancement of corporate data element competitiveness, reporting on new achievements and cases.

Contact email: huangbin@ebrun.com