Ｆｏｏｔｗｅａｒ Ｔｙｃｏｏｎ Ｘｕ Ｃｈｅｎｇｊｉａｎ

ＸＩＡＯ　ＱＩＮＣＨＡＯ　ＸＵ　ＸＩＯＮＧＬＩＡＮＧ

He had neither an enterprise nor products but marketed

his mobility between manufacturers and wholesalers.

IN only six years, Xu Chengjian has forged a nationwide marketing network and put his brand name “Spider King” in the ranks of “Chinas shoe kings.” According to Xu, his success does not lie in his wisdom, nor in his diligence, but in his courage.

First Bucket of Gold

Xu Chengjian used to be a carpenter. In 1986, he found that a vendor of small commodities, leather shoes and garments earned much more than a wood worker. He wanted to start a business, but had no capital. The idea came to him that he could act as a broker between local enterprises and the market outside. He went to Yongjia and negotiated the ex-factory price, and then borrowed RMB 200 in traveling expenses to seek buyers. The factories would not send out goods without getting the cash, so Xu Chengjian bet on the buyers, whom he persuaded to accept his terms: “Goods are delivered upon receipt of the payment.”

After the first few contracts were fulfilled, Xu Chengjian was confident of his new career choice. He continued to recommend new clients, and accumulate trust. At that time, he did not know that his business mode constituted a “virtual operation” – he had neither an enterprise nor products but marketed his mobility between manufacturers and wholesalers. Xu Chengjian filled his first bucket of gold this way.

One day in 1991, a relative of his asked, “I have found two partners to produce and sell sports shoes. How about joining us?” In a heartbeat, Xu Chengjian agreed and has been engaged in the shoe business ever since.

As part of the joint venture, Xu Chengjian was responsible for the production of sports shoes. “At that time, I could not even tell artificial leather from the real stuff,” he admitted. One day, his factory obtained a processing order, but he subcontracted it to another factory. “I wanted to see why that factory could produce better, more inexpensive shoes.” As party A of the subcontract, the factory was obliged to let him supervise and observe every detail of production.

In 1994, the sports shoes business declined, and Xu Chengjian turned to making students shoes. He leased the best stall in a big Beijing market. “The shoes sold well, but returns were terrible and whittled down profits. From that time on, I was determined to make quality shoes,” he said.

Xu Chengjian spared no expense hunting for talent. In 2000, when the monthly salary of a government functionary was RMB 1,000, he offered an annual salary of RMB 118,888, plus one yuan per pair of shoes sold, to a teacher who was good at shoe design and production management. Despite the incentives, the teacher was hesitant to venture into the business world. Xu told him he would wait. Two years later, the teacher came on board to take charge of the companys production.

Profiting in Times of Crisis

Affected by the global financial crisis, the shoe-making industry has entered its winter. “The grim economic situation may continue for a while. In good times, we are able to develop better than others; in bad times, we need to regroup and build our strengths, so that when others cannot make a profit, we can; when others suffer great losses, we dont, or minimize them, and basically, tide ourselves over the low ebbs in the shortest span of time possible,” said Xu Chengjian.

To cope with the price-cutting tactics of firms making similar products, Xu has done an end run. Starting in June 2008, Spider King invested RMB 4 million inviting veteran experts to train marketing personnel. The training program lasted two months and involved more than 5,000 marketing personnel in 22 provinces, autonomous regions and municipalities. Such large-scale training programs have been conducted for three successive years, and will continue this year.

Statistics show that the sales volume of Spider King has increased more than 20 percent year-on-year. In 2009 the company added 800 outlets and upgraded nearly 1,000 old ones, bringing the number of outlets in the Spider King retail network to more than 4,000 across the country.

XIAO QINCHAO is chief editor of the Wenzhou-based Chinas Shoe Capital, and XU XIONGLIANG is chief editor of the Spider King Journal.

Link: Wenzhounese in the Eyes of the Chinese People

Extremely smart and hardworking. Wenzhou people lead trends, never yield to fate, and are willing to embrace any opportunity but one: the stock market. Those who have made their fortunes here are never seen on the stock market. Why? Because their motto is: Never do anything you dont know, and never begin until youre fully prepared.

---Yu Yangyue, freelance writer

Beginning with a little capital, they prove very enterprising and adventurous, and respond fast to the market. Bound by strong hometown ties, they have less trust in outsiders. In short, they are ingenious at small businesses but confused by big ones. If they hit the big time, it is often by luck.

Enterprising is the best way to describe Wenzhou merchants, a word that also applies to commercially successful people anywhere. Its courage and insight that have enabled Wenzhounese to make money in the outside world.

Wenzhounese are manufacturers and sellers in one, and put the money they make back into production — this cycle characterizes the Wenzhou business model. Where theres people, theres business opportunities for them.

Wenzhounese are good at simple businesses but poor at complex ones, owing to their prejudice against people from other places. Is it narrow-minded to trust only your family members and hometown fellows? Sort of, despite the fact that Wenzhounese have ventured into very foreign places to pursue commerce.

---Yuan Yue, Chairman, board of directors, Horizon Research and Consultancy Group

As pioneers in Chinas market economy, Wenzhounese gained their foothold thanks to a daring trait that shapes their business strategy: they are flexible, refusing to be bound by rules, and able to locate opportunities in marginal areas. This propensity has become part of their culture, and even that of the nation at large. Their behavior mode distinguishes them from Europeans, who toe the line while Wenzhounese leverage change. They refuse to be bound by anything. To them, theres nothing unchangeable under the sun.

---- Cao Haidong, media worker

Wenzhounese in Europe lead a life exactly the same as back in their hometown. Mobile phones keep them abreast of every distant happening. Because they often have no friends in Europe, it is not unusual to talk over mobile phones at the dinner table for half an hour with pals back home.

No matter where they go, they are a minority group, unable to integrate into local society. But they are never anxious to do so. Even when doing business, most of the principals remain behind while one or two representatives negotiate a deal on their behalf. Many never go outside their group.

The lucky few without a language barrier interface with the outside commercial world. After they settle the price, cut a deal and finalize distribution channels, they bring the order back for their group to complete. From the boss down to each worker, as well as the machinery involved, nothing is sourced or discussed beyond their group. Its something like a Wenzhou community relocated in Europe.

---- Zhang Yili, Vice Dean, School of Economics, Wenzhou University