Haoyitong: Four Changes in Export

Walking into the President's Office on the first floor of Haoyitong Building, he was greeted by Mr. Chen Qingzhou, who was dressed in business casual clothes and was in high spirits. Behind his quaint desk, there is a folding fan.

"This folding fan was given by a Japanese friend who has worked in Panasonic for 40 years and is in charge of a communications company under the Panasonic Group." Chen Qingzhou said. This is not an ordinary folding fan, it is autographed by Panasonic founder Konosuke Matsushita, and only the best employees of Panasonic can get this prize. "This friend forwarded the folding fan to me because he recognized the cooperation between us very much. In addition to representing our analog walkie-talkie, he also offered to cooperate further."

This folding fan is a great deal A testimony to the initial success of the globalization journey. Years of meticulous cultivation in overseas markets have brought Hoito a lot of fruit. Even in 2008, when the financial turmoil was raging, Hoito had achieved sales of 800 million yuan, a year-on-year increase of more than 40%, of which overseas sales have reached 800 million yuan. 45% of total sales, and the growth rate is as high as 65%. In 2009, total sales are expected to increase by 60%.

Professor Hermann Simon, a European management guru who has studied the development of small and medium-sized enterprises for a long time, found that the growth path of invisible champions in the 21st century relies on two magic weapons: globalization and technological innovation. The internal foundation of the success of SMEs in globalization lies in the fact that the market they choose to enter has similar needs to the original market; the success of technological innovation is reflected in innovation that focuses on customer needs and breakthroughs in major technologies. These two magic weapons have been used by Haoyitong with ease.

Circumventing outflanking and changing due to the situation

In the early 1990s, the main demand for China's walkie-talkie market came from specialized agencies such as the military and police, with a small market capacity and high technical requirements. At that time, the technical level of the domestic walkie-talkie industry could only meet the low-end professional market, and it was very difficult to survive. Until 2000, with the rapid expansion of mid-end professional markets such as public security, railways, urban management, forestry, hotels, and security, this industry ushered in a good opportunity for development. Taking advantage of this shareholder wind, Haoyitong has quickly become the first brand in the industry by relying on the advantages of self-developed products, channels and services.

"Our products have a very high domestic market share. We own 60% of the police market and 30% of the civilian market. Such a market share also shows that our domestic growth space is limited. To develop high-end customers, you must go out." Chen Qingzhou said. After 2004, the domestic walkie-talkie market has entered a fierce competition of low price and homogeneity. To enlarge the scale effect of enterprises, advance to the high-end market, and expand overseas markets have become the only way.

Many companies wait until they grow and expand before starting to move overseas, but Haoyitong's international journey is just the opposite. As early as 2000, Chen Qingzhou has led Haoyitong to develop overseas markets. At that time, among the six or seven hundred employees under his command, no one was even proficient in English. However, there is a huge demand in developed countries, and the price of a single machine is high, which makes Chen Qingzhou believe that entering the developed markets in Europe and the United States can obtain relatively high profits. However, when he was really developing the market, he discovered that customers in developed countries have high requirements for product brand, quality and service, but are not sensitive to product price. Although Haoyitong had won the reputation of the No. 1 brand of walkie-talkies in China at that time, the label of "Made in China" still brought many setbacks to Haoyitong products.

In Chen Qingzhou's opinion, Haoyitong's step of "internationalization as soon as possible" is the right one, because there were many opportunities in the international market at that time, as long as it has the corresponding technical strength and recruits international talents, it can be grasped Live the opportunity. If you wait until the company grows and expand to go international, you will miss a lot of opportunities and pay a lot more cost. However, on the premise of internationalization as soon as possible, due to the lack of in-depth investigation of the target market, Haoyitong failed to achieve much in the developed country market at first. According to Chen Qingzhou, he "paid a lot of tuition fees".

However, the east is not bright and the west is bright. When Haoyitong was struggling in developed markets, Chen Qingzhou noticed that many sales orders came from developing countries that did not attract Haoyitong's attention. Government departments in countries such as Iraq all take Hoytone professional walkie-talkies as their necessary equipment. Customers in developing countries do not have high quality requirements for walkie-talkies, but are more sensitive to price, so products with high cost performance are very popular. The popular Haoyitong walkie-talkie products in the Chinese market are almost always recognized in developing countries.

Sri Lanka is a windfall in these markets, but it's huge. In 2003, Hoyton entered the Sri Lankan market, which is a poor and small country in Asia. Due to its low spending power, it was not included in the list of strategic countries for overseas expansion by Hoyton. It only sold its products to the police force through local agents.

However, these products sold to the police force, due to their high quality and reasonable prices, have finally gained a good reputation. So Sri Lanka's coastal defense came, and even industrial customers such as docks came to the door. In just two years, the local market share of Haoyitong walkie-talkies has reached 70%, forming the absolute first brand. In 2006, the sales of Haoyitong's products in the Sri Lankan market reached one million US dollars. Compared with other countries with million-dollar performance, Haoyitong invested the least here.

Many companies believe that developing countries have small market demands and large investment in development, and Hoitong's harvest in Sri Lanka just shows that it is possible to develop markets in developing countries.

“Our strategy is to cast a net around the world, bloom everywhere, and constantly eliminate the blank spots in the market. Especially in the small corners that multinational companies disdain to go to, we will be there.” Chen Qingzhou said with a smile. Developed markets are always a huge lure. After accumulating enough strength, Haoyitong will kill the market in developed countries. In the field of professional wireless communication, the market demand of developed countries accounts for three-quarters of the total global demand. The US police and military alone spent more than 12 billion U.S. dollars in professional wireless communication in the previous year. The purchase amount is only 3 billion RMB.

Entering Europe and the United States again, Haoyitong started from the gap in the market. Chen Qingzhou said with emotion: "Big professional wireless communication suppliers are unwilling to take the effort to accept customized small orders, but they are the stepping stone to the market for us. After the cooperation of small batch products, we have the ability to enter the high-end market. Opportunities." The initial slapstick made Haoyitong gradually become famous in the developed country market. "When customers have personalized needs, they will think of us first", which makes Chen Qingzhou quite proud .

After 9 years of unremitting efforts, Haoyitong walkie-talkies and systems with the "Made in China" label have been successfully sold to more than 80 countries and regions around the world. two-thirds of total sales. In addition, Haoyitong has gone a step further and successively set up branches and offices in the United States, Russia, Indonesia, India, Turkey and other countries and regions to carry out localized intensive cultivation.

Dividing the market, it changes according to the place

“Sri Lanka belongs to the opportunity market, while Turkey belongs to the strategic market.” Sri Lanka’s unintentional work made Chen Qingzhou start to seriously think about the differences between the various markets , and divide them carefully.

"The division of the strategic market is relative to the opportunity market. There are four main criteria for its selection: first, the market size and market capacity are large; second, this market is suitable for the entry of Haoyitong products; third, In this market, we already have a good foundation, such as the channel foundation, with 40-50 agents distributed in various regions; fourth, we have large customers in key industries." Responsible for overseas market sales, now serving as assistant to the president John explained the basis for the division in this way. In the past six months, he has almost circled the earth several times and has now become a VIP customer on international routes. "We hope to gain the first market share in the strategic market, do a good job in brand awareness and reputation, and at the same time provide better services, so that Haoyitong can develop continuously and stably in these markets." On the territory, Turkey, the Commonwealth of Independent States, Indonesia, and even the United Kingdom are all strategic markets.

“In the strategic market, our goal is to become a local mainstream supplier. Now we have confirmed 10 strategic countries and 10 reserve strategic countries. If the strategic countries cannot be attacked, we will also activate the reserve strategic countries to gather With our resources, we can quickly seize market opportunities." Chen Qingzhou believes that such a division can enable Haoyitong to effectively concentrate its forces and break through them individually.

Opportunities are not easy to come by, even in the strategic markets that Haoyitong has deeply cultivated. Haoyitong has participated in the bidding of the Turkish police system since 2007. In the first year, due to the customer's lack of knowledge of Chinese brands, the opportunity passed by unfortunately; in the second year, Haoyitong sent R&D personnel to Turkey, closely understands the individual needs of customers, and finally stood out in the competition with international giants such as Motorola and ICOM with products and solutions such as handheld terminals and transfer tables, and won the bidding project of more than 8,000 police equipment in Turkey. Turkey's largest police tender in years. In 2009, Haoyitong won the bid for the Turkish police system again, with an amount of nearly 4 million US dollars. In Romania, Haoyitong's TM-800 mobile radio has conquered the bidding project team of the Romanian National Railway Bureau with its excellent cost performance, and won more than 1,000 orders, successfully breaking the situation that the Romanian railway industry has been monopolized by a single brand for more than 10 years.

In the strategic market, Haoyitong has a bright future, and the division of the market is accompanied by the brand strategy of Haoyitong. In developing markets, Haoyitong vigorously promotes its own brands, while in developed countries such as Europe, it mainly provides OEM and ODM products. In November 2008, Haoyitong also established a strategic cooperation with EADS, the largest professional supplier of police communications in Europe, to jointly design and develop police products that meet the habits of European customers.

This is in line with the Made in China brand path. Market competition in developed countries is fierce, and there are many brand predators. Only OEM and ODM brands can get admission tickets. In developing countries, due to the factors of economic level, it is easy to identify with Chinese brands.

Focus on customers, change with needs

A McKinsey survey found that China's top high-tech companies are faster and more successful than their competitors in innovation focused on customer needs. Huawei and ZTE are representatives in this regard, and in the field of professional wireless communication, Haoyitong has also been successful in overseas markets by virtue of this feature.

An example that is still fresh in Chen Qingzhou's memory is: In September 2005, a European dealer reported to Chen Qingzhou that the Italian tax police intercom had been tendered twice, but no one bid, because the tender required new equipment and old systems Compatible, and requires open repeater signaling. Large international companies think that the order amount is not large and the requirements are so harsh, so they should not bid. After research, the senior management of Haoyitong decided to send two R&D engineers to Italy to work with the local police for a week to solve these two technical problems. The prototype was provided within a month of returning, and it was available in two months, a full month faster than normal. Now Haoyitong has become one of the main suppliers of professional communication systems for Italian police.

The reason why Haoyitong can "change according to needs" is that it attaches great importance to research and development and the market. Among the current 1,800 employees, 40% are technical research and development personnel, 30% are marketing and service personnel, 10% are management and other personnel, and the remaining 20% are production personnel. In the past 10 years, Haoyitong has maintained such a ratio, and the allocation of human resources has shown a "smile curve" with "high R&D and market sides". At the same time, the company spares no effort in R&D investment, investing 12% of its sales revenue in R&D every year, which provides good conditions for innovation that focuses on customer needs.

"We constantly understand the needs of the global market, divide the world into several regions, classify customers, and then decide to develop the market with a definite purpose. In this way, we can develop and produce products according to the consumption habits of consumers in different regions. Products that are popular in different fields." Chen Qingzhou said. "For example: some models are popular with the police system, while others are favored by the railway transportation system. In order to be suitable for service industries such as tourism and hotels, we also produce light and compact models. Our fast response Flexible production lines can produce products with a wide variety, small batches and high quality, which makes us highly competitive in the international market."

In overseas markets, in addition to the general characteristics of some industries, Haoyitong also New functions will be developed according to the use environment and the special requirements of the country. For example, the US Forest Fire Protection Department needs to purchase a large number of walkie-talkies, and both American and Japanese brands have participated in the bidding. Haoyitong dispatched people to station in the United States, and learned that rescue workers were often suffocated by smoke and even died in fire accidents during rescue operations. The R&D center soon added the function of "falling down alarm" to the walkie-talkie. At the same time, they added a new function of automatic recording to the walkie-talkie in combination with the characteristics of the United States that focus on court evidence collection. With these two major innovations, Haoyitong successfully won orders from the US forest fire protection department.

"In the first 10 years of its establishment, Haoyitong mainly focused on the mid-to-low-end market, facing the consumer market, security, commerce, hotels and other industries. In the next three years, we turned to the mid-to-high-end market, and independent innovation was based on the development of professional cluster walkie-talkie systems. The range of customers The high-end walkie-talkies they need have high requirements for explosion-proof, encryption and other functions, and we will integrate more functions into the walkie-talkie system according to customer needs."

Chen Qingzhou In the customer communication, the impression is: "Customers have been continuously making demands. After we provide walkie-talkie products, they will continue to make demands. These all force us to consider how to provide a package of solutions."

For example, equipment After purchasing Haoyitong's walkie-talkie products, customers may also need to connect to the police system and police dispatch system. "To find out how many police officers are in a certain area, where are they, and what specific jobs are they doing. Suppose you are in London, make a phone call to the police and say that I have something to do now, and the police should come quickly. Normally, the police take 7 minutes. In China, even in Beijing, Shanghai, and Shenzhen, when conditions are not very good, it usually takes 20-30 minutes for the police to arrive at the scene of the incident after receiving the call, because our current system I don't know where the nearest police officer is to this alarm point. And some customers require effective scheduling management through the system and terminal products, and Haoyitong has also helped them solve this problem well."

"We are now Provide professional and all-round system solutions for government departments such as police, military, and fire protection all over the world. In addition to products, the components of services will gradually increase. In the past three years, Haoyitong's gross profit margin has increased from 42% to 58% , it is getting better and better to make profits through services." Chen Qingzhou said happily.

Quick response, change from time to time

The professional wireless communication market in developed countries has a large capacity, and suppliers all over the world hope to focus on this market with rich product lines and good technical strength. The potential market increments in emerging markets are also expanding. In these markets, competition among professional wireless communication manufacturers is fierce.

As market competition intensifies, R&D and market positions become more and more important. Because at this point, differentiation and customer responsiveness become the keys to winning. Strengthening research and development can ensure product differentiation; strengthening the market can improve the response speed of enterprises and point out the direction for research and development. It is from these two aspects that Haoyitong continues to expand its living space overseas.

“Professional communication products are basically customized, and vary according to different use environments and industries. The first orders of overseas customers are mostly small batches and multiple varieties, with high difficulty and many requirements. When they have some new needs, they will When the original supplier was unable or unwilling to provide it, we would seize the opportunity to provide products that meet customer needs." Chen Qingzhou recalled, "Listening to customer requirements, developing products in a targeted manner and responding quickly are exactly what we do. Core competitiveness."

"Targeted development is guaranteed by the process." Zhongaldehyde, general manager of Haoyitong R&D Department, further analyzed, "General product development will follow the entire process from strategic planning, product demand research and product development. We will do special fast-track development according to the clear and urgent requirements of customers. For this reason, we have established a product management electronic platform for product customization.”

The subtlety of this platform lies in the setting of the budget package. , which makes it possible to quickly connect customer needs and R&D costs, so that the sales department has a quantitative basis for R&D costs when bidding. On this platform, the R&D department provides a budget package for sales and other departments. The budget package provides cost data of various R&D technologies or products. When sales colleagues receive clear requirements from customers, they can query the corresponding package in the package. Estimate the R&D cost of a technology or product and make quick decisions.

"R&D has a dedicated team corresponding to customized development, and is responsible for product maintenance and improvement. As long as it is within the scope of the budget package, sales colleagues can quickly decide whether to do it or not. This is a great improvement in efficiency and change," Aral said. "Once a decision is made, R&D will maintain close contact with customers, and the research will meet the specific needs of the customer's region and satisfy them." decisive role. At that time, the customer needed to purchase a large number of walkie-talkies, but the condition was that the walkie-talkie products must use the customer's own encryption board. Some competitors cannot provide products that meet the requirements of the encryption board or the corresponding interface, and some think that it will take a long time to establish this project. After getting this information, Haoyitong will immediately send R&D engineers to communicate with customers and learn about their actual requirements.

At the same time, the company quickly organized a team of experts in radio frequency and software interface in China, concentrating a team of more than 10 people to overcome problems, quickly make corresponding changes, and put the encryption board on the walkie-talkie provided by Haoyitong , and finally successfully obtained its purchase order for 30,000 walkie-talkies.

“Our average time to complete a simple customization is one week, and we can make a new product in seven days; the length of the customization time depends on the complexity of the project. The CIS order requires 45 days to provide a prototype, and we are requesting It takes 2-3 months for other competing companies to set up a project. The 45-day time schedule includes research and development, exchange of technical solutions with overseas, and sending personnel to take products overseas for testing.” Zhongaldehyde said, "The improvement of customization efficiency is also one of the focuses of my work every year."

Haoyitong has now packaged basic functions such as encryption, clustering, and recording to form a "technical shelf". Every time a new product is developed or a customer has a new demand, engineers can choose one of the technologies or products from this "shelf", combine and reprocess, and develop a small number of new functions on this basis to quickly meet client needs.

In addition to being responsive to customers, Haoyitong continues to rapidly launch new products. After 13 years of R&D investment and unremitting efforts, Haoyitong has more than 100 patents in industrial design, mechanical packaging, electronic circuits and software algorithms, and many patents are in the application stage. These patents are mainly related to mobile communication design and technology, applicable in both analog and digital fields.

As the most promising digital trunking technology in the field of professional wireless communication, Haoyitong entered the project in 2004, and its R&D investment has increased year by year. In 2009, the company invested three-quarters of its research and development funds into the research and development of digital trunking systems and terminal products, and hired a group of international experts in the industry to lead the development of the project.

“2009 was the year of research and development. Hoito has launched a full range of products in the digital trunking TETRA standard and DMR standard.” Zhongaldehyde said.

At the end of 2008, after the industry leader Motorola launched the GP2000S high-end walkie-talkie, Haoyitong Technology launched the HYT-TC3000, HYT-TC3600 and other high-end walkie-talkies in the first half of 2009, demonstrating the ability of Haoyitong to quickly launch high-end products. strength. Among them, the HYT-TC3600 is a collection of the technical crystallization of Haoyitong Technology for more than 10 years. It is the world's first LCD walkie-talkie with a Chinese interface and can send text messages.

The "variable" nature of Haoyitong makes its export road relatively smooth, but obstacles also exist. Like many domestic small and medium-sized enterprises going abroad, Haoyitong needs to always think about the shortage of overseas talents and the management of localized employees of overseas companies. The practice of many enterprises also shows that the solution of these problems still requires long-term efforts.

However, "love to fight will win", and Haoyitong people are making steady progress on the way to become the world's most valuable professional wireless communication equipment provider.