Langteng Industry: Innovating in Rigid Needs

Dongguan Zhongyuan City Logistics Park, in a remote corner, from a creaking freight elevator to the 4th floor, is Dongguan Langteng Industrial Co., Ltd. A not too spacious aisle leads to the office of General Manager Li Weiwen, and there is a row of unopened machines lined up along the aisle. This is a customized production line for a major customer.

Like all small, growing businesses, this company is humble and cluttered, but full of energy. Since its establishment in 2011, it only took 3 years to achieve the first sales in the field of MHL (mobile phone video line), and also signed well-known customers such as OPPO and Xiaomi. Now, the selfie sticks produced by this company are affixed with the LOGOs of various brands, and they are popular on eBay, Amazon, Tmall and other platforms.

Li Weiwen graduated from the Chinese Department in his early years. He has been immersed in shopping malls for 10 years, and he still has a strong bookish spirit. He likes to use Xiaomi as a benchmark: "Xiaomi sells mobile phones, it's popular; it sells routers, it's popular; it sells millet boxes, it's also popular. I can even sell 200,000 sockets. I was shocked at the time."

Why does Xiaomi sell all kinds of small things so popular? "Because it finds innovation in the rigid demand." Li Weiwen understands the rigid demand market in this way: there will always be people who want to buy plug-in power strips, and everyone has three or five at home. It is not too much, and it can be used in the office. He believes that innovation in the rigid demand market is the way for Langton to take in the future.

From Chaos to "Fun"

While MHL and selfie sticks are products that Li Weiwen is proud of, Langton's original product was a connector. "The factories that produce this kind of components belong to the very downstream manufacturers in the industrial chain. In addition to the competition from some large factories, we did a very hard job at that time, and the turnover in the first year was only 8 million."

Li Weiwen said frankly: "At the beginning of our business, our thinking was not very clear." After groping for a year in this chaotic state, he and his entrepreneurial partners wanted to go to the upstream of the industry chain to have a look, so the company began to transform Do the connecting line. At that time, MHL, a digital interface specification for outputting high-definition images from portable terminals, was rapidly spreading, and its application was extended to fixed-type products such as TVs, Blu-ray disc players, and AV amplifiers, as well as in-vehicle terminals, in addition to portable terminals such as smartphones and tablet PCs. and other fields. A rigid market is taking shape, but there are very few domestic manufacturers.

Lonton seized the opportunity and quickly entered the field. At that time, there were only 40 workers in Langton's factory, and the average daily production of data lines was less than 2,000, but the return was amazing, "almost three times the profit." The company's turnover increased exponentially, from the initial 8 million, to 20 million, reaching 36 million in 2013.

"When we made the selfie stick product, it was very fun. It was really just needed. There is a popular Internet saying: If you don't take pictures when you eat, you can't do it." It was circulated on the Internet The joke made Li Weiwen laugh.

But this is a rigid market that big factories are unwilling to step into and small factories are powerless to do. "Because its supply chain is very complex, there are plastic keys, induction chains, springs, hardware keys, and stainless steel pipes." After entering this field, Langteng found that there are many large customers, and the customer's "density is very high".

Langteng's first order for a selfie stick was 50,000 yuan. Because of the tight delivery time, it was too late to open the mold, so "some people in the company flew to Zhejiang to find the stick, and others were in Zhuhai. Triangle drives the car every day looking for plastic keys." Due to the insufficiency of raw materials, the company has no way to choose the fat ones, but "even if you buy them back and re-select them one by one", it will be worth the price in the end. It can be seen that the initial profit was considerable.

As one of the first companies to bring selfie sticks into China, although Langteng has done a very good job in selfie sticks, Li Weiwen is not optimistic about its future. He expects that there are at most three selfie sticks. years of market life. Recently, major attractions around the world have imposed bans on selfie sticks, which may cause them to wither faster.

In fact, Langten started planning for a day without selfie sticks three years ago: the company has already started producing Apple's peripherals, and has become an authorized supplier of Apple accessories, as well as custom-made for major customers. several production lines. After the selfie stick, it may only be a matter of time before Langteng finds the next immediate need.

Lonton's core value is win. How to win? It's not just finding the just need, Li Weiwen believes that it is necessary to innovate in the rigid need. The same is the socket, why can Xiaomi sell 200,000? Because it's done beautifully and simply, that's innovation.

Lonton makes selfie sticks in various shapes, even into heart-shaped necklaces that can be worn around the neck. "We have half of our energy in developing new styles, new trends. The best-selling selfie stick is an aluminum alloy selfie stick, which is very light." Langten also tried to make it shorter and shorter. It can be put into the pocket to solve the portability problem of the selfie stick.

This innovation is not limited to products. When producing MHL, many factories are reluctant to accept orders because customers' orders are often small batches and diversified. But Langteng accepts customization, accepts mixing and matching, and even accepts orders for 50 pieces. Fragmented orders will inevitably lead to rising costs. Langteng's response is to prepare materials in large quantities. "It's July now, and maybe our materials for August have already entered the factory. Suppliers usually give us a 60-day billing period, but our customers only give cash, and they pay when they place an order, so our funds are also It is very abundant.”

“In our industry, a factory with 1,000 people can make about 100 million a year. Our factory has less than 100 people, but it has achieved more than 30 million.” Li Weiwen once wrote After a rough estimate, it is concluded that the per capita output value of Langteng is the highest in the entire industry.

The secret is automation.

A customer once asked Li Weiwen: Your company is so small, if my orders increase exponentially every month, how can you guarantee the quality and delivery of the products? When visiting the factory, the customer found that the important processes of ensuring quality on the production line are all done by machines. "We use machines as much as we can without people. If we order now, we will use one robot. If the customer places three times the order, I will buy three such robots." Li Weiwen replied to the customer.

Because of ensuring high efficiency and low cost in production, and the product can be surprisingly successful, the company can certainly win.

Growing Pains

But in 2014, Langteng encountered growing pains.

Before 2014, the company's operating mode was no different from before: "We will do whatever the customer wants, and if the customer doesn't ask for it, we will make some inventory and wait for him to buy it." But Li Weiwen found that , "We can't move anymore".

The company expanded its scale in 2014, and the plant has grown from 750 square meters to more than 6,000 square meters, and operating expenses have also risen rapidly. "We definitely can't make orders like 50 or 100. When a factory has 30 people, it can do it and still make money; when it has 100 people, it doesn't necessarily make money. When it's 300 people, if we go to take this order, we can only make money. Losing money. The original profit was high because your management costs were low and the company’s operating costs were also low. After your costs increase, the original tripled gross profit may only be left with 50% after the baptism of the market. In other words, such customers can no longer support our large-scale operations."

This may be a problem that many small and micro enterprises will face after successfully upgrading to small and medium enterprises. It turns out that the boat is small and easy to turn around, and what is sold is easy to sell. The extensive production method can also make double profits. However, when the company grows to a certain scale, it needs to put more effort in management.

"It turns out that Amazon sold hundreds of sticks in the last month, and we also made tens of thousands of sticks, but in the end we found that we couldn't make seafood and fried rice at the same time." Li Weiwen put the company Like a restaurant, in the end, you have to decide whether to be a high-end restaurant or a fast food restaurant.

Li Weiwen's choice is naturally the former. "We are now investing a lot of money in equipment and talent training." Langteng, who was always willing to come, also began to select customers, "We hope to serve some higher-end customers, who have their own product ideas and products. Not so sensitive anymore. Being an Apple licensor helps us a lot."

Ten years later, China's manufacturing industry will definitely be the most powerful in the world, because no other country can replace China's manufacturing industry. When I started selling 10 years ago, our industry was basically Taiwan-funded, and the factories in the mainland were very inconspicuous, and they were all accessories and OEMs. This decade has changed a lot, and Chinese companies have now accumulated a lot of power. Our own company has also started from manual operation to semi-automatic production now.

In addition, I think China's manufacturing industry will move inward. China's coastal industries are now dense, and the inland population is very vacant. Manufacturing doesn't have to be so industrially intensive. When I went to the United States, I found that they developed very evenly on each continent, which was completely different from ours, especially the industry. I went to my client's place, he was in a very remote place, but the environment was very good, lined with green trees, he couldn't see it at all, there was only reinforced concrete, and then a lot of factories were added. I conclude that after ten years, factories will move inwards, at least 50 or more, and the number of factories in coastal areas will be less than half.

What will Langton look like in 10 years?

It should be one of the best companies in the industry. The number one does not refer to its number, but its structure. I have been in a big company for 6 years and founded Langton for nearly 5 years. I am well aware of the drawbacks of some big companies, so the final destination of our company may be many companies.

We are also planning in this way. We invest in other companies, each of which has its own main business, rather than expanding Langteng and then expanding. At present, we have already invested in three companies in the surrounding area.

How will your life change in 10 years?

I am a person who likes to move around very much. I may go to various places in the world, mainly to find business opportunities. I may spend more time in non-developed countries, such as Africa and South America.

In China, I will not be in Dongguan or Guangdong in 10 years, but will go to the mainland. Because China's basic transportation, high-speed rail, subway, and intercity railway will be very developed in 10 years, it is possible that everyone's office environment will undergo great changes.