Plum umbrella's headquarters in Jinjiang, the famous umbrella town of Dongshi, but Money Week reporter met with Plum umbrella's secretary of the board of directors, Mr. Zheng Jiayao, but in Xiamen, a somewhat old building.
? Xiamen here is still an office, mainly responsible for internal sales, part of the OEM order-taking salesman, most of the company's business is still in the headquarters in Jinjiang. Just back from outside the office of Zheng Jiayao told reporters, ? Here is the beginning of the year just created.
In the course of the interview with the reporter, Zheng Guiyao is still dealing with the chairman of the board of directors Wang Anbang to go to Brazil's air tickets, ? We hope to have some breakthroughs in the North and South American markets this year.?
Hard to pull back the first single business
In Jinjiang interview a few days, the reporter contacted almost all of the locals on the Plum Blossom Umbrella Company are no strangers to the Plum Blossom Umbrella's products to be exported, its rain and sun umbrellas exports, the amount of exports, exports, the number of countries and regions are ranked in the national umbrella manufacturer, and the Plum Blossom Umbrella's founder, Wang Anbang, the story of the local community is also widely circulated.
1991 spring fair, Wang Anbang with two umbrellas, alone to the Canton Fair to find opportunities. Due to the lack of entry permit, Wang Anbang had to squat in the doorway and wait, lunchtime leisure time, while the foreign businessmen out of the museum to eat time, in the Fujian Provincial Foreign Trade Center at the time of working with the help of a friend, Wang Anbang and two U.S. foreign businessmen **** into the lunch, and took the opportunity to take two umbrellas with the foreigners to talk about it.
Because he did not know English, Wang Anbang with a calculator in his hand, with the way of gestures, in a while you back and forth haggling after a good price. But when it came to signing the contract, there was an unforeseen complication.
? The price is OK, the foreigner is very happy, but this time there is an accident. My friend's side, and want to raise their prices, the foreigners do not accept to go. At that time I went to get him back, he did not understand, not back. I was so anxious that I took the umbrella in my hand and gave it to him, trying to get him to come back and sign the contract. The foreigner is not clear, thought I want to give him the umbrella, see this situation I pulled him very tight, hard pull back. Wang Anbang said. In this way, he pulled back the first foreign single business.
By 1995, he developed the idea of creating a brand. According to my character and my experience over the years, I named the brand Plum Blossom, and I am interested in the poem ? The sword is sharpened from the sharpening, the fragrance of plum blossom comes from the bitter cold? I feel very strongly about it," Wang said. Wang Anbang said.
After determining the brand name, in order to promote the brand of plum blossom, Wang Anbang set a rule: all foreigners named to the plum blossom brand, not only can enjoy preferential prices, but also enjoy the preferential treatment without deposit; if you want to OEM, not only the price should be doubled, but also look at the enterprise's production line whether there is free to arrange. This move not only did not scare away customers, but because of the establishment of the brand credibility to retain the old customers.
? Last year, the Russian market accounted for one-third, down to the European Union, Japan, the United States, Ukraine, the three years 60% -70% of the share in these markets.? Zheng Jiayao told reporters, ? Our ` brand is very famous in Russia and Ukraine, in Italy we enjoy the highest courtesy, become the object of imitation, I and our chairman in the airport in Italy to see the suitcases on the tie rod are tied to our umbrellas.?
Autonomous brand + OEM
Plum umbrella from 2003 began to build its own brand, and the gross margin of the independent brand is higher than the OEM. according to the relevant data in 2007, the difference between the two is 3 percentage points.? Now the sales of the independent brand has accounted for more than half.? Zheng Jiayao revealed.
The transformation from OEM to own brand is an inevitable process of enterprise development.
? A few years ago, we felt that OEM OEM is not a long term, and we need a sense of independent branding to add to it. So our production model to the independent brand more and more rely on such a mode of change. OEM order is the guest to give us a deposit, and then we go to buy raw materials, arrange for production, and then delivery, independent brand needs us to plan production, research and development, but also sales, these two modes are completely different, but the independent brand to our sales to bring a relatively large stabilization of the role. Zheng Jiayao told reporters.
In addition, the standardization of products is also an important reason.
? Plum from OEM to independent brands when there is another point, is that we face too many markets around the world to do, each market is different, to a certain size, because of low production efficiency is difficult to be bigger.
Cheng explained, ? Like the Russian market customers, may like umbrellas heavier, while in the East Asian market more hope that the product lighter, so it is more difficult to determine the standard. We do our own brand, is that we based on the global market, according to their own experience, the relative standardization of products into several series, so that several series in the global market can be accepted.
Specifically, Plum Blossom Umbrella's main products cover manual umbrellas, self-opening umbrellas, self-opening and closing umbrellas and other three categories, 13 kinds of umbrella size specifications, covering the straight bone, one fold to six fold and other umbrella bone styles, more than 3,000 kinds of flower and color styles.
According to Plum Blossom Umbrella's 2008 annual report, all the products, self-opening umbrella operating profit margin is the highest, as high as 28.94%, followed by automatic umbrellas and beach umbrellas, operating profit margins of 12.30% and 10.29% respectively.
? The gross profit margin of large umbrellas is higher, small umbrellas, then last year the whole of China's export volume is probably the lowest in five or six years, we are also worried about the sales of small umbrellas this year will not be out of the inflection point, large umbrellas are growing in these years. Zheng Jiayao told reporters.
More than 50 countries marketing network
? Our biggest advantage is that Plum Umbrella has been doing for more than ten years, the customer base is very good, our customers in the world in each year can cover at least 50 countries, and last year it reached 69 countries, the customer is more extensive, the marketing network is also more extensive.? When it comes to the main competitive advantage of the plum umbrella, Zheng Jiayao told reporters.
Umbrella as a daily necessity, its demand is relatively rigid, the price becomes the key to marketing.
? In foreign countries, as long as the quality is good, the price is cheap, the product is easy to be accepted, for example, in Italy, we have a product, this product is sold in Italy, especially the right way, so all of a sudden the whole market situation opened up, a year can sell three or four containers. Zheng Jiayao said.
? The entire Italian market that the retail price of that umbrella should be about twenty euros, we give the supplier to the market to sell, the price is only a dozen dollars, the customer thinks it is very cost-effective, so all of a sudden the whole market all spread out.
And in the marketing approach, Plum Blossom umbrellas choose to wholesale through the local Chinese.
? In foreign countries, we find a dealer in each country. In some of the independent brand to do better, we will find some of the foundation to do better Chinese to do our agent, these Chinese may be the original in the local is to do clothing, batteries, or the original is to do the wholesale business of umbrellas, they can help us to bring our brand in.
?
Speaking of the specific reasons, Cheng explained, ? Because in these markets, we were originally doing OEM, and now we are doing our own brand, the market acceptance is relatively faster. In addition, the Chinese dealer culture out of the same cultural background, but also convenient for us to communicate.
So, how much profit margin can this marketing model bring to the agents?
? Our foreign distributors are able to make more profit from the agency process than we do. We originally gave the foreign importer of the production, they will mark up the price of 40% -60% to sell to the second channel wholesalers, we are now looking for the Chinese agent is equivalent to the first channel of the importer to replace, so his profit margins come out.?
Export to domestic sales
Although relying on foreign markets, Plum Blossom Umbrella is gradually developing the domestic market, export to domestic sales is considered the next step in the company's transformation focus.
? This year, we are still slowly take a step, that is, in the long term to rely on the international market is still a bit of a problem, after all, there are more than a billion people in the domestic market, and now we are also doing the domestic market. The domestic model and different, the Chinese market is so big, so complex, and we face the international market is not the same.? Zheng Guiyao said.
In fact, Plum Blossom Umbrella in 2007 has begun to establish the domestic sales system, initially in Beijing, Shanghai and other 17 key cities to complete the preliminary paving, and medium and high-end parasols as a breakthrough, into the higher value-added high-end umbrella market. In addition, the company set up in 2005 in Jiujiang, Jiangxi Province, Jiujiang Plum Umbrella Co., Ltd. to take full advantage of the abundant and relatively inexpensive local labor resources, land resources and raw material resources, and to take advantage of the local geographic advantages to occupy the domestic market.
? Export-oriented enterprises to do domestic trade, is another matter entirely, we need to learn. The industry itself is relatively special, the first few brands, like heaven, their share has been very large, we do not want to be too positive to meet such competition, so our grade is slightly higher, but because of the grade is high, this year's consumption and a little bit down, so this year, we are not a large amount of the plan, at present, we are still mainly through the provincial agents in the sale of products. Zheng Jiayao told reporters.
He expects that in 2009 the umbrella industry may have hope for recovery. ?In 2009, many small and medium-sized enterprises, especially for the local market, such as South Korea, Japan or the United States, will be a relatively large impact and influence, large customers are not assured of them, these orders will certainly be transferred, will be centralized.?
Zheng Jiayao cited the example of the Canton Fair. From the point of view of our Canton Fair, this year's situation will be a little better than last year, when the Canton Fair was held last year, the entire international exchange rate system, the price of raw materials are in a very chaotic state, a lot of inquiries, but very few signed, and this year to come to the basic sign a single. This year's Canton Fair situation allows us to see the industry's hope for recovery, after the third quarter may be a little more obvious. In the Japanese market, some mainstream channels are resuming contact with us.
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