Among many domestic appliance companies, Fangtai Group (hereinafter referred to as "Fangtai") has always been well-positioned to position high-end markets and "carve" high-end products. Rarely, Fang Tai is also branded with a symbol: a unique corporate management culture based on Chinese excellent culture. At the same time, its chairman and president Mao Zhongqun also has the reputation of "Confucian merchants". 640.webp

Born out of "second entrepreneurship"

The birth of Fang Tai can be traced back to a "crisis" encountered by Mao Lixiang (Mao Zhongqun's father), who started with an ignition gun more than 20 years ago.

In 1984, with six small punches spun off from the Cixi Zhanghe Welfare Factory, Mao Lixiang founded the Cixi Radio Component Nine Factory. In 1992, the 9th Cixi Radio Component Factory was renamed Ningbo Feixiang Electronic Industry and Trade Corporation (hereinafter referred to as "Feixiang Company") and exported ignition gun products. By 1994, Feixiang Company ushered in a glorious moment. Its ignition guns accounted for 50% of the global market share, and Mao Lixiang was also known as the "ignition gun king".

However, the crisis immediately approached. In the wave of reform and opening up, due to the low technical content of ignition gun products and the low threshold of the industry, many players have entered the ignition gun market. Everyone is competing to suppress prices, and vicious competition in the industry continues, which eventually leads to the decline of the development of the entire industry. Feixiang is also on the verge of loss.

Under the predicament, Mao Lixiang reflected: Why has the company's ignition gun business achieved the world's first production and sales, and will still be in crisis? After contemplation, Mao Lixiang believes that the crux of the problem is that the company does not have its own brand and independent core technology. So far, Mao Lixiang has buried the seeds of the second entrepreneurship to become an independent brand and to have independent core technology.

At this time, coincidentally studying at Shanghai Jiao Tong University, Mao Zhongqun, who is studying power system automation, is about to graduate. Mao Lixiang called Mao Zhongqun, who was about to go to the United States to study for a doctor, to call home. He hoped that Mao Zhongqun could inherit his father ’s business and take over the flying company to jointly meet the challenge. Mao Zhongqun agreed to his father's request.

However, in order to circumvent the existing problems of Feixiang Company before the new business was launched, Mao Zhongqun and his father "three chapters about the law": first, the company was moved from the town to the development zone of Cixi City, and jumped out of the previous business, and set up an independent Brand "Fang Tai"; second, start a new one, old employees do not want, relatives can not enter; third, the directional decision of the new company is at its own discretion.

In the end, Mao's father and son reached an agreement, the company changed the runway and entered the range hood industry, producing range hood products.

In January 1996, Ningbo Fangtai Kitchenware Co., Ltd. was established. By 1998, the advertising slogan "There is a Fang Tai for cooking, and a Fang Tai for removing oily fume" was spread all over the country.

Talking about the company's "initial intention" in the range hood business at that time, Mao Zhongqun once said that through market research, customers found that there were six major dissatisfaction with the range hood products: poor effect of the range hood, noise, dripping oil leakage, Inconvenient to remove and wash, ugly appearance, unsafe. Therefore, as a latecomer to the market, Mao's father and son realized at that time that they must make efforts to solve the pain points through technological innovation to avoid vicious competition. This time, Mao's father and son invested 30 million yuan to create Fangtai, and devote themselves to innovative research and development.

Since then, in order to maintain a steady development momentum and continuously enhance R & D strength, Fangtai has formulated a strategic deployment of investing 5% of sales revenue every year in technology research and development. According to data disclosed by Fangtai's official website, as of July 2019, Fangtai has owned nearly 3,000 patents, including more than 400 invention patents. With the support of independent core technology, Fang Tainian's sales revenue (excluding tax) exceeded 10 billion yuan in 2017, becoming the first kitchen appliance company in China with sales exceeding 10 billion yuan. In August 2019, at the annual press conference, Mao Zhongqun predicted that the company's annual revenue in 2019 will reach 11 billion yuan.

Twists and explorations

Like the growth path of most companies, the Fangtai brand has also encountered "shock waves" in the development process.

Mao Zhongqun once recalled that Fang Tai developed rapidly in the first few years of its establishment, but at the end of the first five years of its establishment, it felt that the company had a shortcoming in management. "Because we focused on products in one hand and marketing on the other in the first five years, development was relatively good at that time. However, by the fifth year, sales were the same as the fourth year."

Therefore, in the second five years of its founding, Fangtai began to focus on solving management problems. "At that time, three main measures were taken: one was the introduction of executives from Fortune 500 companies, the second was that I went to China Europe International Business School to study for an EMBA, and the third was to fully introduce the model of excellent performance." Mao Zhongqun said.

For the internal management model, Fang Tai has been seeking the "optimal solution" at each stage of development. In the third five years, in order to solve the management problem, Fang Tai implemented a fourth solution: from 2008, Fang Tai fully introduced Chinese excellent culture in corporate culture and management.

Fangtai is a gradual process for Fang Tai. It can be said that in the first 10 years of Fang Tai's establishment, Mao Zhongqun was a western management apprentice. However, in practice, he discovered that there are various conflicts between Western management education managers and local employees in behavior management. Especially when Fang Tai's business expanded and more and more foreign offices, tens of thousands of employees could not keep up with the system management alone. The necessity of finding a suitable corporate culture for Fang Tai became apparent.

Therefore, starting in 2008, Mao Zhongqun wrote the basic spirit of Confucianism "benevolence, righteousness, etiquette, wisdom, and faith" into the company's values, requiring that every party, from senior executives to ordinary employees must have such a lifeline .

"If a management is to be effective, it must be" walking on two legs "," one leg "is the beliefs and values of employees, and the other" one leg "is the management of the system. Without one leg, people are not stable. Introducing the excellent Chinese culture into modern management also hopes to make up another 'leg'. "Mao Zhongqun said that when talking about the Fang Tai cultural system that Fang Tai has been implementing for more than 10 years.

Fang Tai has been exploring a medium- and long-term incentive mechanism for employees of non-listed companies since 2008. Fang Tai has finally formed a full-person incentive system centered on the "body share system" after two full years. After organizing various departments to conduct systematic discussions, starting in 2010, all employees who meet the applicable scope and have worked for Fangtai for more than two years do not need to invest in shares, and automatically become the target of the company's stock incentives. For the stocks, employees participate in the dividends of the company and the business department based on the stocks they hold.

Open up a new runway

Fang Tai's next goal is to become a 100 billion yuan enterprise.

For Fang Tai, who is still in the scope of 10 billion yuan in revenue, sprinting the 100 billion yuan mark and finding incremental space is a challenge that cannot be ignored.

Regarding the search for incremental space, Mao Zhongqun once told reporters: "I believe that a market as large as China is enough to support a kitchen appliance enterprise with a revenue of 100 billion yuan. Of course, our product line will continue to expand, like Sink dishwasher, on this product line, I believe that this product will become a necessity for Chinese families in five to ten years, a basic configuration. And we are the original inventor of this product, only this product It may bring us tens of billions of revenue. Our product line is now ten, and it may be extended to at least a dozen in the future. In the near future, it should be said that Fangtai will still be in the kitchen appliance industry, but it has developed from the long-term See, the kitchen appliance industry is not enough. "

Moreover, a problem that needs to be confronted is that under the influence of the economic downturn and real estate regulation and control policies, the kitchen appliance industry has ended its sustained high growth trend for nearly a decade and entered a "shift period", and the industry development has shown a downturn.

Aowei Cloud (AVC) omni-channel push total data shows that in the first half of 2019, the retail sales of kitchen appliances was 28.14 billion yuan, a year-on-year decline of 9.5%. Among them, the retail sales of range hoods were 16.72 billion yuan, down 10.7% year-on-year; the sales of gas stoves were 9.37 billion yuan, down 6.3% year-on-year; the retail sales of disinfection cabinets were 2.05 billion yuan, down 13.9% year-on-year.

However, Mao Zhongqun is not pessimistic about the situation facing the kitchen appliance market at this stage. "I think the negative growth is short-lived. Compared with other home appliances, the penetration rate of kitchen appliances is relatively low, especially in the third and fourth tier markets. In the next stage, China will fully realize a moderately prosperous society and satisfy people ’s need for a better life. Yearning, I believe this space is still relatively large. "

It is worth noting that Fang Tai has already sounded the horn to open a new runway. In August 2019, at the annual press conference, Fang Tai announced to enter the two major areas of integrated cooking center and water purifier. At the same time, Mao Zhongqun also revealed to the media reporter that the company has entered into the refrigerator field and the discussion of multi-brand operation, but there is no conclusion at present.

As for why they chose to cut into the integrated cooking center, Mao Zhongqun explained: “Since China ’s kitchen area is relatively small, the split and embedded kitchen appliances used to occupy cabinet space, and the requirements for cabinet space are relatively high. Therefore, integrated products have A certain market, or a market segment. "

At present, in the face of the complicated kitchen appliances market, as a kitchen appliance leader, Fangtai is also inevitably under market pressure. However, this company with 23 years of hard work and its helm still seemed confident. In Mao Zhongqun's view, the third- and fourth-tier cities and strengthening the to B business will bring many opportunities to Fang Tai.