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Physical Branding, Customers, Partners, Employees
Recently, the 2024 Yabuli China Entrepreneurs Forum Annual Conference with the theme of "Building a New Development Pattern and Promoting High-quality Development" was held in Yabuli, Heilongjiang. Wang Linpeng, chairman of the company, was invited to participate and shared his thoughts on the development of China's real industry brand. The following is an excerpt from the transcript of the speech.
Looking back on the 25 years of development of the house, starting from a traditional small building materials market, it has now become an important and influential brand in the field of physical commerce, in the process of digital transformation of physical commerce, we have played a benchmarking role, and at the same time, we have also played a pioneering role in leading Chinese enterprises to internationalization.
First of all, the first essence of doing business is to create value for customers.
As a retailer, our customers are end consumers, so it is crucial to be able to provide customers with better goods and services than our competitors, which is the first foundation of our existence.
The first concept of "advance compensation" was pioneered. In the 90s, when the Chinese market was just opening up and opening up, consumers shopping in any shopping mall or supermarket, if the quality of the goods was substandard or there were after-sales service problems, it was difficult to find the responsible person, because the business model at that time was that the supplier distributed the goods, and the goods belonged to the supplier rather than the shopping mall. In order to change this situation, after I took over the home in 1999, I took the lead in proposing the concept of "advance compensation", and decided to take the lead in implementing the measure of paying consumers first and then recovering from the merchants.
The concept of "advance compensation" is to stand in the perspective of customers, be responsible for them and create value, which is an important foundation for the development of the home from a small building materials market to a commercial brand. Since then, many of the service concepts we have proposed, such as no reason to return and exchange, green environmental protection, etc., have not only been widely recognized in the furniture industry, but have also become the universal rules of business practice. Now, whether it is a shopping mall, a shopping mall or a home furnishing store, if they are not responsible for their own products, then they will not be able to gain a foothold, and this is the principle that we must adhere to as a brand: to bring value to customers.
Second, bring value to partners and improve supply chain efficiency.
When providing services to consumers, we are not alone, especially in the home furnishing industry, which involves a wide range of supply chain industries, from manufacturers to distributors, and then to intermediate logistics service providers, each link should create value for each other, if this cannot be achieved, then the relationship between each other will be reduced to a game, forming a "you have more, I have less" situation, such a brand is destined not to last long. Therefore, if you want to build a lasting brand, you must think carefully about how to create value for your partners.
We always focus on establishing a standardized and concise way of cooperation with our partners, so our business partners are willing to form deep friendships with us and support each other in times of difficulty. Theoretically, this is to create value for our partners by improving their efficiency, and the House is moving further along this path. Our business model is designed to allow manufacturers to focus on product development without having to be distracted by trivial tasks such as delivery, installation, warehousing, etc., as well as dealers, who can rest assured that these chores will be handled by us.
Third, bring value to employees.
I don't think it's enough if we're just going to provide value to our customers and improving supply chain efficiency. Over the years, through in-depth thinking, we have realized that if a platform and brand cannot bring value to employees, and employees do not grow on this platform and realize their life dreams, then our brand will not be sustainable.
Now, everyone is talking about Fat Donglai and Huawei, two companies that can be said to be outstanding examples of China's business and technological innovation. Many people study, learn, and examine them because they have successfully turned enterprises into entrepreneurial platforms for employees, which is a great advance of the times. The core of Fat Donglai is not its commodity, but its profit distribution model, which distributes 95% of the profits to the employees, and the boss only takes 5%. That's why the annual sales of such a local supermarket in Xuchang, Henan Province can reach more than 10 billion yuan. During this year's Spring Festival, the flow of people in Fat Donglai exceeded 1 million people, and it has become a place where people from all over the country compete to learn because it creates great value for employees.
The same is true of Huawei, whose employees are almost all shareholders and can share the company's profits through shareholding, while Fat Donglai directly distributes 95% of the profits to employees, 50% to management, and 50% to ordinary employees. This profit distribution model prompts us to rethink the traditional business model.
As a result, I've been exploring how to hand over my shares to employees step by step. In the past, many of our subsidiaries have adopted the method of employee ownership, and I am the majority shareholder holding 60% or 70% of the shares, while the employees hold 30% or 40% of the shares. But since last year, we have decided to gradually take back the platforms of these subsidiaries and withdraw the shares of employees, because in the current capital market environment in China, it is very difficult for employee stock ownership platforms to go public and cash out through the IPO model, and employees put their hard-earned money into the company, and if the company cannot be listed, it will be a huge burden for them. Therefore, we take the initiative to evaluate and recover the employees' shares, but retain their dividend rights, that is, although the employees' shares are withdrawn, they still enjoy the dividend rights corresponding to the original shares.
For other entrepreneurs or bosses here, this question is also worth thinking about. In the future intelligent era, labor relations will undergo great changes, no longer the traditional relationship between the boss and the manager, the home has carried out in-depth practice in this regard, and invested nearly 100 million yuan to repurchase employee shares, while retaining the right to dividends of employees. This initiative has been unanimously welcomed and supported by the staff, and now that the two teams are self-driven and managed, I hardly need to be involved in their day-to-day operations, which is a very big change and one of the important results we have achieved in the design of the employee system.
Source: https://mp.weixin.qq.com/s/a_spli2TTB6S7Qq-DmwX7g
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