Hengyuanxiang's development path

Let me briefly talk about Hengyuanxiang's situation. Hengyuanxiang has a history of 80 years. It was established in 1927. We did not write this paragraph in our economic history. From 27 to 1937, we called it the golden decade in the media at that time. In fact, China was in the period of the Republic of China, 27 years 37 years is the fastest development time of the entire nation's capital. Hengyuanxiang was established in 27 years by taking advantage of the tide of the times. At that time, when Hengyuanxiang was established, we only made wool, and this wool was an adventure imported from abroad. The wool at that time Same as what is it now? It is equivalent to LV bags. Consumers who could afford pure wool at that time are equivalent to those who can buy LV bags now. They belong to high-end consumers. In the past, the advertisement for our woolen yarn was a rich lady sitting beside the gramophone, with a footstool on her feet, yarning in a casual and comfortable environment. This means that his lifestyle has reached a certain height, and it is the same as we are now carrying LV bags.

From 1927 to 1937, Hengyuanxiang was a private enterprise. In 1937, there were four factories and three stores. It was such an enterprise that "also works as well as business". At that time, national capital first originated in Shanghai, especially the textile industry. The whole of Shanghai has experienced unprecedented development. In 1937, we know that after the war of aggression against China, China's economy and politics experienced great turmoil, and the entire enterprise did not develop much. In 1949, we all know that liberation, a large number of our national capitalists brought enterprises and cash to Hong Kong or emigrated overseas. At that time, the capital industry in Shanghai was very weak. In fact, the state of the entire national industry in 1949 was very fragile. In 1956, Hengyuanxiang became the first joint venture company in Shanghai. We used to be a private enterprise. In 1949, we established New China, which is an economic system under the plan, so we decided to make a public-private partnership. What is the result of the joint venture? It was Heng Yuanxiang who left the negotiation, that is, the four factories that sell woolen yarn are all state-owned, and the woolen yarn store is also state-owned, but the name of Hengyuanxiang is only used by the store.

As we all know, Heng Yuanxiang has basically not developed very well since liberation. In 1966, there was even an extreme behavior, and Heng Yuanxiang's behavior was also changed and changed into a large woolen yarn store, because 1966 was during the Cultural Revolution. At that time, he thought that Hengyuanxiang had the color of capital, so he changed the name of Hengyuanxiang to a large woolen thread shop. Why? Sailing the sea depends on the helmsman. In fact, we all know that the take-off of the entire Chinese economy did not start in 1978, but in the late 1980s and early 1990s, the entire Chinese economy took off, including the development of some township enterprises and some listed companies. capital platform for financing. Hengyuanxiang also did not have a good chance in such a process.

In 1987, Hengyuanxiang still had a woolen yarn shop on Nanjing Road with an area of more than 100 square meters, with assets of more than 500,000 and more than 30 employees. Our current general manager and chairman was Jin Hengyuanxiang in 1987, when it was a state-owned enterprise. What did he think about when he came in? What would happen if the store Hengyuanxiang was demolished during the renovation of the old city? It means that Hengyuanxiang is gone. As you can see, Shanghai was the gathering place of Chinese brands in the past, and Shanghai is the birthplace of the entire Chinese brand, but now think about it carefully, what brands are there in Shanghai so far? You will feel very sad, where are the brands that used to occupy most of the front in Shanghai now? If we think about it carefully, we will feel that the city of Shanghai is developing very fast but the brand of Shanghai is very sad. But we can say that the brand has no regionality, not the brand in Shanghai or Beijing, but we need to be clear about the operation mode of the brand, how can the brand continue to innovate and develop continuously for a long time? This is what we have to think about. Why are so many brands gone?

In 198_9, in order to allow Hengyuanxiang to develop well, we registered the three words Hengyuanxiang as a trademark at that time. We all know that Hengyuanxiang became a trademark in the true sense in 198_9, not our traditional name. . What is the significance of being a trademark? Hengyuanxiang can sell its own brand products in the market. But what is the current situation of Hengyuanxiang? Because we are a store, we don't have the human, material and financial resources to build factories or sales outlets. So the model we're doing now is very similar to the way I talked about the Olympics. Hengyuanxiang has operated a virtualized theme structure and virtualized brand operation since the beginning of operation. What about Hengyuanxiang's factory? Find cooperation. What about the network? Also look for cooperation. Now everyone knows what we call franchising. In 1990, we didn't know what franchising was. There was no such concept. But in 1990, we practiced such a brand operation model. Only we can survive and develop.

Heng Yuanxiang's first pound of wool was officially launched on March 1, 1990, which is a milestone in the history of Hengyuanxiang. At that time, Hengyuanxiang had neither the popularity, nor the scale of the enterprise, nor the brand advantage of the entire market. Under such circumstances, it was very difficult for Hengyuanxiang to survive. By 1996, Hengyuanxiang had become the world's largest enterprise selling woolen yarn and producing woollen yarn. At that time, as the subject of many economic experts' research, why did Hengyuanxiang become the largest woolen yarn sales and production enterprise in the world from a small store in such an environment? At that time, many experts were summarizing why Hengyuanxiang succeeded?

At the time we felt that three points were the most important. The first one we got a very good trademark, what is a good trademark? It means that the trademark has obvious individualized distinctiveness. What is individuality? Your trademark should not be found in phrases, sub-seconds, and words, so we now see problems with many brands, Great Wall, and Panda. In 1996, we conducted a survey. In 1996, all companies in China used Panda as their brand. , there are 122 companies. Of course, these companies are unrelated to each other. A very classic case in the world is Panasonic, which can operate in Japan, but not in other English-speaking countries. It is a concept of a country. So it took 1.6 billion US dollars to change the English name, which is slowly awakening by many countries, that is, don't make a mistake when starting a trademark, because you can't afford the cost you will pay in the future, especially in the future internationalization on the road you cannot afford. The second is the distinctiveness of the trademark. If you take apart Hengyuanxiang, it is very rare that the three words are eternal, evergreen, long-standing, and auspicious. So we do a survey, what do you think of when you see Hengyuanxiang? 80% of consumers will think of Chinese culture, will receive Confucianism, will think of a long history, such a concept. The memory of such a brand to consumers is like the first time we meet consumers alone. I hand you a business card and give you my name. This is the first memory, and this memory produces associations in people's impressions, which is very, very important. Of course, the Hengyuanxiang brand also has fatal problems.

The second is the application of the virtualized operation organization model. Our production plants and sales outlets are combined using virtualized organizations. Everyone knows that the clothing industry is not a high-tech enterprise. Unlike Wuliangye, it must be made in such a feng shui treasure land. Clothing can be made everywhere in the world, and there will be no major problems due to the water quality and soil quality of this place. But what does it mean? Clothing is a bulk category, a low-threshold industry that many companies can enter. If we establish an integrated production system, sales system, and value chain system, we now see that many companies have exports of more than 90 billion, but many Enterprises rely on tax rebates to make money, not to make money from brands and markets in the true sense. So when China really becomes the world's factory, it is the beginning of China's sorrow. We are quite sad in China now, why? The pollution of the environment is so severe that each of us now knows that the water we drink is unhealthy, the air we breathe is unhealthy, and many things in our lives are unhealthy. What should we do? We also have to live in a land like this, and that's the price we pay for being the factory of the world.

The central government has been emphasizing that we need sustainable development, invest in environmental protection, and adjust the production structure and business model of enterprises, but this is easier said than done? This cannot be explained clearly in one or two sentences. For the vast majority of Chinese companies, many companies that undergo such qualitative changes will go bankrupt. We used such a virtualized operation mode and found some professional institutions, professional factories, and professional sales outlets to cooperate with us to operate in the market. Third, we feel that we have found a lot of bright spots worth mentioning in the promotion of the entire brand and the communication and interaction with consumers. How did we promote the woolen yarn at that time? First of all, we all know that wool is a weaving sport, and weaving is a leisure way. If wool is turned into a sport, there may be more people knitting, and the consumption of wool will be greater, so we think whether to put wool into a sport. Wool becomes a weaving sport, and if it becomes a sport, the consumption of wool will be large.

We found the then director of the National Sports Commission to the company to talk to him about whether woollen weaving could become an Olympic event. We have two theories. The first theory is that woollen weaving is good for children's intellectual development. Several elementary schools have conducted experiments. Can children's intelligence be improved by knitting wool? That is for sure. Why? There are more than 20,000 nerves in the human brain. The only thing that is connected to our human organs is the hand. We call it ten fingers connected to the heart. Your hands and brain movements are combined, which is helpful for children's attention. In our experiment, many children, especially children with ADHD, improved their grades very quickly. The second is wool weaving and the prevention of Alzheimer's disease. Everyone seems to be irrelevant. At that time, we conducted research in pilot universities for the elderly across the country. 99% of the elderly who like to knit will not have Alzheimer's disease. This is based on scientific evidence. of. The elderly often knitting is good for his physical and mental health. At that time, we talked to Wu Shaozu, he said yes, why? He said that woolen weaving is a good thing. The leaders at the time said so, and we think it is possible in China. We just wondered if we could let people all over the world do woolen weaving? In this way, the consumption of wool is greater.

For this dream, we decided to make woolen weaving an Olympic sport. Is it possible? If it becomes an Olympic event, people all over the world will knit wool. So for this matter, we flew to Lausanne to talk to then-Olympic President Samaranch about making woolen yarn an Olympic sport. The time for the discussion was 40 minutes. During the discussion, he thought the idea was ridiculous, but in any case this The idea is still very interesting, so we will hold an extreme wool knitting exercise in the 2008 Olympic Games, we will give him a reward for enjoying the Olympic champion, and we will give him as much as the Olympic champion can win.

Hengyuanxiang is still Hengyuanxiang, we are still a state-owned enterprise of a listed company, and Hengyuanxiang has not grown much. In 1997, Hengyuanxiang expanded its industry. Now you can see that Hengyuanxiang has four major industries, one is traditional wool, the other is clothing, the other is home textiles, and the other is knitwear, such as wool sweaters and cashmere sweaters. The product. Our sponsors at the Olympics are apparel and home textiles sponsors, and I'm going to talk about those next to the Council.

Hengyuanxiang has been well developed and greatly improved through these operations. In the top 500 brands in China just last Friday, Hengyuanxiang ranked fourth with a brand value of 9.458 billion yuan, which is also the top three in our industry. Hengyuanxiang is also one of the top ten most valuable brands in China. Time-honored brand, we ranked second. During the operation of Hengyuanxiang over the years, our brand has been greatly improved. At present, there are more than 100 factories in foreign countries and more than 7,000 sales outlets nationwide. The annual retail sales of Hengyuanxiang brand is close to 4.5 billion. Hengyuanxiang's enterprise has been greatly improved, and there is a great reason for us to become the sponsor of the Olympic Games.

Why are we going with the Olympics? In the 1996 Olympic Games, a brand forum was held to study the internationalization of Hengyuanxiang's brand. At this forum, we gave the experts a blow. What is this stick? Hengyuanxiang brand cannot be internationalized, why? Consumers in the world and consumers in non-Chinese speaking areas, what is the concept of Hengyuanxiang? There are three patterns, and there is no way to recognize or remember them, so Hengyuanxiang cannot become a global brand. We knew it in 1996. What is the second realization? If a brand wants to build a global brand, it must know the cost. We say the cost into three costs, the first is the import cost, the second is the maintenance cost, and the third is the promotion cost. What is the so-called import cost? We conducted research in Europe and the United States, and established a brand in Europe and the United States. In 1997, the cost of introducing a brand was 60 million US dollars. The second year you have to maintain on this basis, what is the cost of maintenance? There is also a data of 50 million US dollars, and in Europe it is 70 million US dollars. There are many countries in Europe, and the United States is one country. The third aspect is to increase the cost, that is, on the basis of your brand, you need to continuously raise your brand. What is your cost? It was about 100 million US dollars. We were very clear at the time that the internationalization of Hengyuanxiang is not a simple slogan and brand internationalization, but we must know whether we can pay such a cost if our Hengyuanxiang brand is to become international, this is our responsibility. To recognize clearly. Therefore, we are very clear that Hengyuanxiang does not have such capabilities and conditions, and we do not have the system to become an international brand.

We need to pave the way to prepare for internationalization. There are two points. First, Hengyuanxiang establishes an international team and image system, so that consumers all over the world can finally know Hengyuanxiang. Second, when the entire Chinese brand has established a strong position in the minds of global consumers, we can truly promote Hengyuanxiang to the world, because in the minds of global consumers, the level of Chinese brands is relatively low. It is impossible to establish a high image, I will give an inappropriate ratio. If Coca-Cola is produced in Ethiopia, the Coca-Cola we see now is definitely not the current Coca-Cola. When we drink Coke, we say that it tastes like Ethiopia. It is a mess, it must have a national brand culture. This is what we do on a lot of brand systems.

Finally, I will tell you about several tasks that our company is going to do next.

For the first task, we conducted a non-sensing research on a brand. What is a non-sensing research? We recognize a brand is traditionally visual recognition, which dominates our entire brand building process, but we ignore several other senses. What are our hearing, smell, taste and touch? When a brand contacts consumers through the five senses, we must agree on the feelings of the other four senses. We have been working with one of the world's top design companies in the Netherlands two years ago to study the insensitive performance of brands. The second is to cooperate with the United States (Mernier), an authoritative company for smell and smell in the United States this year. We will study what the smell and taste of Hengyuanxiang are, and what will be presented to consumers in the end.

The second part is called the study of culture. What does the study of culture know about us? Cultural Research Council determines the fate of an enterprise. What is the fate of an enterprise? We think so, fate is a market demand, and luck is your ability to grasp the market demand. Destiny is how you see this demand, how to achieve this demand through your own abilities, and how you master the fate of the culture. What is culture? Culture is a habit. How to form a habit in our daily behavior and the behavior of consumers? Let it form an identity, form a belief, so that you can build your brand for a long time.

The author is the deputy general manager of Hengyuanxiang Group and the general manager of the Olympic Project Department of Hengyuanxiang Group.