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Yangtze Business Daily NewsEditor's Note

Chinese elements will add color to the 2024 Paris Olympics. Domestic brands such as Anta, Xtep, and Jomoo will also appear at the Olympics to help Chinese athletes win gold.

Anta, Xtep and Jomoo come from the same place - Jinjiang, Fujian.

Jinjiang has created a miracle among Chinese counties. It has 51 listed companies, ranking second among counties in China; it has produced 26 billionaires, including Ding Shizhong, Shi Wenbo, and Ding Shuibo, with a total wealth of 750 billion yuan; it has created 42 well-known brands, including Anta, Peak, Jomoo, Hengan, Septwolves, Shuhua, and Xtep.

In this issue, the Yangtze Business Daily selected three Jinjiang tycoons from different fields, and through their extraordinary entrepreneurial experiences, revealed the miracle of Jinjiang's rise from a side and micro perspective.

● Yangtze Business Daily reporter Shen Yourong

The Paris Olympics is in full swing, and every Chinese athlete who wins a gold medal wears the red and white "Champion Dragon Suit" designed by ANTA and steps onto the podium. ANTA has frequently appeared in the circle with Olympic athletes, which is the masterpiece of Ding Shizhong.

In the past 33 years, Ding Shizhong started from Jinjiang and led Anta Sports (02020.HK, hereinafter referred to as Anta) to the whole country and "stepped" into the world. He grew from a boy in a fishing village to the head of a domestic brand worth hundreds of billions, and developed a small workshop in a fishing village into the number one sports goods group in China and among the top three in the world.

Ding Shizhong survived in the cracks. At the beginning of his business, Anta was surrounded by strong domestic and foreign competitors such as Adidas, Nike, and Li Ning, but Anta survived and achieved the transformation from following to surpassing.

With the help of brand, channels and capital operation, Ding Shizhong has made Anta a giant with a market value of nearly HK$200 billion. Today, Anta no longer avoids the edge of Adidas and Nike, but confronts them head-on. He said that Anta is the Anta of the world.

Ding Shizhong once said that he is competitive and aggressive. Entrepreneurs in Jinjiang can shine as long as they are given a little space.

The outside world commented that Ding Shizhong is brave in hard work, daring to innovate, having a strong character, and with an extraordinary business acumen, he has pushed Anta forward through the wind and waves.

A series of unique strategies made him the richest man in Jinjiang

Ding Shizhong's entrepreneurial experience is very inspiring. It seems ordinary, but it is difficult to replicate.

In 1970, Ding Shizhong was born in a small fishing village in Jinjiang, Fujian, a poor county.

In the early 1980s, in order to fill their stomachs, Jinjiang people started shoe workshops with a few scissors and sewing machines. At first, they worked as OEM for overseas brand shoe factories. Ding Shizhong's father Ding Hemu also opened a shoe workshop with his relatives. However, competition became increasingly fierce, and the Ding family's shoemaking business could not continue.

In 1987, 17-year-old Ding Shizhong persuaded his family to go to Beijing alone with 10,000 yuan scraped together by his father and 600 pairs of carefully selected Jinjiang shoes.

Ding Shizhong carried his shoes to the mall every day, begging the mall, but the mall refused to accept his shoes. In desperation, Ding Shizhong came up with a solution - put the shoes on consignment at the mall, and pay after the mall sold them.

As the price was relatively low, the shoes were put on the shelves and sold well. Ding Shizhong followed suit and continued to use the consignment method, gradually opening up the market. Then, he rented a counter in the mall to sell Jinjiang shoes in both wholesale and retail, and his business expanded step by step.

Ding Shizhong soon discovered a problem: his Jinjiang shoes could only be sold at a low price, while Qingdao Double Star shoes could be sold at a high price. He realized that this was the power of the brand.

In 1991, Ding Shizhong returned to Jinjiang with 200,000 yuan earned from Beijing. The three of them founded their own shoe factory and applied for registration of the trademark "Anta". He said that he wanted to do a good job in the shoe business "peacefully and steadily".

Around 1999, Ding Shizhong made a surprising move. He invested 800,000 yuan to invite Kong Linghui to be the spokesperson and spent another 3 million yuan on advertising on CCTV, which was equivalent to spending all the profits of the year on marketing.

At that time, only top international sports brands such as Nike and Adidas had celebrity spokespersons. Ding Shizhong rejected all objections and firmly believed that if Anta wanted to establish its brand, it must have its own spokesperson.

In 2000, Kong Linghui defeated the Swedish table tennis champion Waldner in the table tennis competition at the Sydney Olympics. Anta became a household name because of Kong Linghui's endorsement, and its sales jumped from 20 million yuan to 200 million yuan that year.

Ding Shizhong and Anta made the right bet, with sales increasing tenfold in one year.

In 2004, Li Ning was listed on the Hong Kong Stock Exchange, and in 2005, Erke went public in Singapore. In 2007, Ding Shizhong also promoted Anta's listing on the Hong Kong Stock Exchange, which received 183 times oversubscription and raised more than HK$3.5 billion, becoming the world's fifth largest sports brand.

After becoming famous, Ding Shizhong set his sights on the international market. Anta sponsored the CBA, the Olympic Games, and entered the NBA, building a global brand matrix.

On July 15 this year, Ding Shizhong also served as a torchbearer for the Paris Olympic Games. This was his fourth time as an Olympic torchbearer since the 2008 Beijing Olympic Games.

Ding Shizhong's world ambitions gradually emerged and his wealth grew exponentially.

In February this year, Amer Sports, the parent company of Arc'teryx under Anta Group, was officially listed on the New York Stock Exchange. Ding Shizhong's net worth soared to 146.6 billion yuan, and he continued to be the richest man in Jinjiang.

The global conquest will never stop

Why can shoes made in Jinjiang only be sold in Jinjiang? Why can’t Anta be the world’s Anta? Ding Shizhong, who is naturally competitive, has long been eyeing the global market.

Starting a business is like sailing against the current. Only by never stopping can you avoid being abandoned. After mastering the secrets of branding, Ding Shizhong continued to increase his investment in brand building. The shortcut to building a brand in the international market is acquisition.

In 2009, Ding Shizhong invested 332 million yuan to buy the Chinese business of Fila, a famous Italian sports brand that had been losing money for years, using it as a springboard to enter the high-end and international markets.

Under his careful management, Fila soon turned around, with annual revenue exceeding 20 billion yuan, becoming the leading fashion sports brand under Anta.

Ding Shizhong's acquisitions were unstoppable.

In 2015, Anta acquired the sports and leisure brand Sprandi in Russia and Eastern European markets.

In 2016, Anta invested 150 million yuan to establish a joint venture with Descente's subsidiary and Itochu Corporation, and acquired Descente's exclusive operation, product design, sales and distribution business in China.

In 2017, Anta acquired KOLON SPORT, a high-end Korean outdoor brand founded in 1973. This acquisition enabled Anta to make an important breakthrough in the outdoor market.

At the end of 2018, Ding Shizhong launched a century-long acquisition that shocked the industry. A consortium led by Anta Sports made an offer of 4.6 billion euros (about 35.6 billion yuan) to acquire all shares of Amer Sports, a Finnish high-end sporting goods giant.

This is the largest cross-border acquisition in the history of Chinese sporting goods. In the eyes of the outside world, this is a gamble that Ding Shizhong is willing to make.

The merger and acquisition was successfully completed, and Ding Shizhong brought 13 international brands including Arc'teryx, Salomon, and Wilson under his control.

After a series of mergers and acquisitions, Anta's industries have covered many sports fields such as skiing, mountaineering, cross-country, rock climbing, road running, etc., achieving full coverage of sports scenes.

Today, Anta has 75,000 sales outlets around the world, covering North America, Europe and Asia-Pacific, making it one of the top three sporting goods groups in the world.

Anta Sports' business continues to improve. In the first half of this year, the company's brands grew by as much as 40%. Amer Sports, which went public in February this year, continued to make profits in the first quarter.

Ding Shizhong no longer avoids Nike and Adidas. He chooses to confront them head-on. He believes that the Anta of the world is competitive enough.

Ding Shizhong has ambition and strength, and his strength comes from research and development. From 2021 to 2023, Anta's R&D investment will be 1.116 billion yuan, 1.279 billion yuan, and 1.614 billion yuan respectively.

ANTA has established five major design and R&D centers in China, the United States, Japan, South Korea and Italy, and has carried out research cooperation with more than 60 top scientific research institutions and more than 3,000 companies around the world.

Of course, there is still a gap between Anta and giants like Nike.

But Anta's slogan is "Never Stop". Ding Shizhong said that only by sticking to down-to-earth business, daring to innovate, and never stopping on the way forward can we move forward accurately and steadily.

Visual China Image

Xu Lianjie and Shi Wenbo have jointly created a paper industry empire for 40 years. Hengan International's gross profit margin is only 33.7%. It is increasing its investment in high-end products to seek change.

Yangtze Business Daily News● Changjiang Business Daily reporter Wang Jing

Although they have different surnames, they are as close as brothers. Fujian businessmen Xu Lianjie and Shi Wenbo have worked together for 40 years to build the paper industry empire Hengan International (01044.HK).

Xu Lianjie and Shi Wenbo are known as the "Hengan Duo". In 1985, the two founded Hengan Company together and became the "pioneers" who stepped into the blank market of "sanitary napkin production". They quickly conquered the city and laid out the industrial chain including diapers and paper towels.

Although they are neither family members nor relatives with the same surname, Shi Wenbo and Xu Lianjie have maintained a stable relationship for 40 years. Today, Hengan International is a domestic paper industry giant with an annual revenue of nearly 23.8 billion yuan, an annual profit of 2.8 billion yuan, and a market value of 28 billion Hong Kong dollars.

Hengan International also faces challenges. The threshold for producing household tissues is low, the industry is involuted, and coupled with rising raw material costs, Hengan International's profitability has declined in recent years. The company's gross profit margin was 42.26% in 2020 and dropped to 33.7% in 2023.

How does Hengan International maintain its position as the “big brother” in the fierce market competition?

The two heroes of Hengan made their fortunes through women's business

From a poor boy to the "Godfather of Southern Fujian Business", Xu Lianjie's business legend is still talked about today.

In 1953, Xu Lianjie was born in a poor family in Jinjiang, Fujian. He dropped out of school early to help supplement the family income. The little Xu Lianjie was smart and sold eggs, fruits and lard. It was not until the 1980s that opportunities came. Xu Lianjie boldly started to work. He first founded the Anhai Houlin Labor Protection Clothing Factory, and later returned to the village to establish a transportation fleet with his friends to provide freight services for major factories in Jinjiang.

During this process, he found that many factories needed labor protection products, but there was almost no supply in this field. He immediately decided to set up a clothing processing factory called "Houlin" with several fellow villagers to produce labor protection clothing for enterprises. It was also during this process that he met Shi Wenbo, who was also in the clothing business. The two were from the same hometown and had similar personalities, and they soon became good friends.

Unlike Xu Lianjie, Shi Wenbo is more low-key. He was born in Jinjiang, Fujian, and moved to Hong Kong in the 1970s. He returned to start a clothing business because he was optimistic about the mainland market.

However, just when their business was booming, in 1983, the United States suddenly announced import quotas on textiles from China. Processing orders dropped sharply, the industry was in a depression, and the two men could no longer do business.

At this time, Yang Rongchun, a technician from Anhai General Machinery Factory, sold a batch of new equipment to Xu Lianjie. This was a batch of equipment for producing sanitary napkins. Since sanitary napkins were not popular at that time, Xu Lianjie was not interested in it. But after some understanding, he realized that this was a huge business opportunity. Shi Wenbo and Xu Lianjie hit it off and decided to establish the first domestic sanitary napkin brand.

In 1985, Hengan Company was officially established and began to produce a sanitary napkin named "Anle". The two were right in their predictions. Soon, the sanitary napkin exploded in the market and even changed the hygiene habits of Chinese women during menstruation. Xu Lianjie and Shi Wenbo also imported advanced production equipment and technology from abroad at a high price, and launched the "Anle" sanitary napkin with wings. Later, it also extended to the field of baby diapers. For a period of time, "Anle" even became synonymous with diapers.

With the brand established and the market opened up, Xu Lianjie and Shi Wenbo gradually expanded the company's business to the entire household paper field. Today, "Seventh Dimension" sanitary napkins, "Heart to Heart" toilet paper, and "Anle" diapers have entered thousands of households.

On December 8, 1998, Hengan Company was renamed "Hengan International" and officially listed on the Hong Kong Stock Exchange. As of now, the market value of Hengan International is about HK$28 billion.

High-end products face challenges

Although a single tree cannot make a forest, unlike many Fujian businessmen, Xu Lianjie and Shi Wenbo did not rely on complicated family ties to manage their company, but directly abandoned family-style management.

In 2001, Xu Lianjie made an important decision, namely the "TCT (Total Cycle Time Management Model) Action" that caused a sensation across the country - Hengan Group signed a three-year contract with Thomson Group, a well-known American management consulting service company. The management consulting fee was Hengan’s half-year profit at the time - 10 million US dollars. The purpose was to upgrade Hengan’s management.

After introducing scientific management methods, Hengan’s sales exceeded the 1 billion yuan bottleneck in 2003 and entered a stage of rapid development.

By 2023, Hengan International will achieve operating income of 23.768 billion yuan, up 5.1% year-on-year; and net profit of 2.801 billion yuan, up 45.5% year-on-year. When it was first listed in 1998, Hengan International's operating income and net profit were 1.009 billion yuan and 270 million yuan respectively. In 25 years, Hengan International's operating income and net profit have increased by 23 times and 9.4 times respectively.

Among them, in 2023, Hengan International's sanitary napkin business revenue was 6.178 billion yuan, a year-on-year increase of 0.4%, accounting for 26%; the paper towel business revenue was 13.748 billion yuan, a year-on-year increase of 12.2%, accounting for 57.8%; the adult diaper business revenue was 1.254 billion yuan, a year-on-year increase of 4.3%, accounting for 5.3%.

But it is worth noting that this year's profit level has declined significantly compared to the peak in 2020.

In 2020, at its peak, Hengan International's revenue was only 22.37 billion yuan, but its net profit was as high as 4.595 billion yuan, far ahead of the three major domestic household paper giants (Hengan International, Zhongshun Jie Rou, and Vinda Paper).

From 2021 to 2023, Hengan International's gross profit margins were 37.38%, 34% and 33.7% respectively, lower than 42.26% in 2020.

Why did this happen? In fact, although Hengan International made its fortune from sanitary napkins, its largest source of income is still household paper. Hengan International once said that the rise in raw material prices and operating costs has brought huge challenges to the industry, accelerating the elimination of the weak and the retention of the strong.

From the perspective of the industry, under the background of profit pressure and intensified industry competition, domestic paper product companies have grasped the "life-saving straw" of "high-endization". In recent years, Vinda International has successively expanded high-end new products such as the 3D Beauty series of wet toilet paper, Duokang QuickDry strong quick-drying hand towels, and Vinda Cotton Tough Luxury Soft Tissues.

In addition to its fellow paper giants, Hengan International is also facing challenges from some cross-border "new players". The technical threshold of the paper towel industry is relatively low. Brands such as Deyou and Babycare, which originally focused on maternal and child products, have also begun to enter the relevant track. Even retail brands such as MINISO and HEMA have begun to launch hygiene products.

In order to cope with rising raw material prices and industry involution, Hengan International is also upgrading its products. The 2023 financial report mentioned that the sales revenue of Hengan International's "Cloud Sense Soft Skin" series exceeded 1.3 billion yuan, a year-on-year increase of 26.6%, and the sales revenue of the wet wipes business was about 931 million yuan, a year-on-year increase of 10.5%.

The three brothers Zhou Shaoxiong have been "full of wolfishness" for 35 years. Septwolves' annual revenue hovers around 3.4 billion and is yet to be broken through

Yangtze Business Daily News● Yangtze Business Daily reporter Shen Yourong

In the Chinese men's clothing market, Septwolves is an unavoidable brand, created by the three brothers Zhou Shaoxiong from Jinjiang.

In the eyes of Zhou Shaoxiong and his three brothers, wolves have noble qualities that are respected by humans. 35 years ago, Zhou Yongwei, Zhou Shaoxiong and Zhou Shaoming started their own business and named their company Septwolves (002029.SZ). They took wolf culture as the company's cultural gene and formed a unique brand identity and concept.

For 35 years, the three Zhou brothers have been united and fought side by side. Despite the changes in the situation, they have survived the darkest moments. They embody the full "wolf nature".

In addition to clothing, the Zhou brothers' businesses also extend to real estate and investment.

China's clothing industry has experienced many cold winters, and Septwolves has survived all the way. However, since 2012, the company's performance has basically stagnated, and it is in urgent need of breaking through and rushing forward again.

How will the three Zhou brothers embrace the challenges of the new era?

Three entrepreneurial brothers explain wolf culture

In summary, the entrepreneurial history of the three Zhou brothers and the development history of Septwolves are a microcosm of the development of China's menswear industry.

Unlike Jinjiang tycoons like Ding Shizhong who started from scratch, Zhou Shaoxiong brothers broke their iron rice bowls and started their own businesses.

Zhou Shaoxiong, born in 1965, was assigned to work at Xinhua Bookstore. Zhou Yongwei, born in 1962, is Shaoxiong's elder brother. Before starting his own business, he served as deputy director of the Jinjing branch of the Jinjiang branch of the Bank of China.

Public information shows that Zhou Shaoxiong participated in an exhibition by chance, resigned from his job and started a trading company after returning. After several efforts, he gradually saved some money.

In 1985, a small enterprise called Jinjiang County Jinjing Labor and Overseas Chinese Garment Craft Factory appeared in Jinjing, Jinjiang, a seaside town in southern Fujian. This garment factory was opened by Zhou Shaoxiong and was also the prototype of Septwolves.

During his business, Zhou Shaoxiong found that the price of clothes made in Jinjiang was very different from that of clothes made overseas. When end consumers go to shopping malls to choose clothes, they first look at the trademarks on the clothes.

Recognizing the power of brands, Zhou Shaoxiong made up his mind to create a domestic brand on his own. After a period of deliberation, the three brothers and seven entrepreneurial partners decided to use the wolf as the company's trademark and named the company "Seven Wolves".

Talking about the trademark and company name afterwards, Zhou Shaoxiong said that wolves are smart, agile and courageous. A lone wolf is easy to defeat, but a wolf pack that is sincere and united is hard to defeat. Septwolves wants to be a wolf pack, relying on loyalty, unity and agility to form competitiveness.

In 1990, the Septwolves brand was officially established. In that year, Septwolves clothing entered well-known shopping malls such as Shanghai Hualian, and received good market response.

The Septwolves brand achieved initial success, but what was worrying was that counterfeiters followed closely behind.

In response, Zhou Shaoxiong made an unexpected decision - to fight against counterfeiting. At that time, Septwolves was only a little-known brand. Zhou Shaoxiong carefully planned a war against counterfeiting, sued several counterfeiters in court, and carried out a high-profile fight against counterfeiting. This was extremely rare at the time and attracted great attention from the market and the media.

The "battle between real and fake wolves" broke out in Shanghai, Guangzhou, Beijing and other cities, and the media reported on it one after another, causing Septwolves' popularity to soar rapidly.

The anti-counterfeiting incident reflects Zhou Shaoxiong's brilliant marketing concept and also reflects his cunning.

In addition, Zhou Shaoxiong also hired celebrities to endorse his products to tap into the brand effect. In 2002, Septwolves signed a contract with the famous singer Chyi Chin, which was once jokingly called "two wolves dancing together." Later, Septwolves also cooperated with celebrities such as Leon Lai, Sun Honglei, Zhang Zhen, Hu Jun, and Zhang Hanyu.

At the same time, Zhou Shaoxiong adopted an agency distribution model to quickly push products into the national market.

There is no doubt that Zhou Shaoxiong and Septwolves have succeeded. Septwolves was once a fashion IP in the minds of those born in the 1970s and 1980s. According to the official website of Septwolves, the main product of Septwolves, jackets, has ranked first in the overall market share in China for 24 consecutive years.

The challenge of being stuck in a growth bottleneck

Although Septwolves is as famous as brands such as Shanshan, Youngor, and Peacebird, it is facing new challenges.

Over the past 35 years, the three brothers Zhou Shaoxiong have worked together with their entrepreneurial partners to better interpret the wolf culture. In the eyes of the outside world, Zhou Yongwei is the "alpha wolf" of the seven wolves, and Zhou Shaoxiong is known as the "wolf king".

Septwolves has also taken detours. “Men have more than one side” – this is the advertising slogan of Septwolves. In fact, the “Wolf King” has more than one side.

Henghe Qishang, located in Xiamen, Fujian, is known as one of the top ten luxury homes in Asia. The builder of the luxury home is Zhou Shaoxiong. The land parcel of Henghe Qishang was won by Xiamen Henghe Real Estate, a wholly-owned subsidiary of Septwolves, in 2009.

Zhou Shaoxiong had the ambition to enter the real estate industry. As early as the early 1990s, Septwolves entered the real estate industry. Unfortunately, the real estate hopes were dashed, and Septwolves' clothing business was also greatly affected. In 1995, Zhou Shaoxiong and his brother refocused on the clothing business.

But the real estate dream of Zhou Shaoxiong and his brother did not die, and they returned to the real estate market around 2005. In addition to real estate, the Zhou brothers also have investment businesses, investing in more than 60 companies, including 19 listed companies, including Xiamen Bank, Dinaike, and Shengyuan Environmental Protection.

Zhou Shaoxiong mainly invests through Septwolves Holdings, which has three proprietary platforms: Septwolves Venture Capital, Septwolves Energy Conservation and Environmental Protection Fund and Qicheng Capital.

Among the three Zhou brothers, Zhou Shaoxiong is in charge of the overall business of the Septwolves Group, Zhou Yongwei is in charge of the hotel and real estate business, and his younger brother Zhou Shaoming is in charge of finance.

With multiple businesses including clothing, real estate and investment, it is difficult for outsiders to estimate the wealth of the three Zhou brothers.

In terms of the clothing business, Zhou Shaoxiong has also made some moves. In 2017, Septwolves spent 320 million yuan to acquire most of the Karl Lagerfeld brand's business in Greater China.

However, overall, the clothing business of the three Zhou brothers still faces challenges.

In August 2004, Septwolves landed on the A-share market, becoming the first listed menswear company in China. In 2009, the company achieved a net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") of 204 million yuan, and operating income of 1.987 billion yuan. By 2023, Septwolves' net profit was 270 million yuan, a year-on-year increase of 79.30%. Although it increased significantly year-on-year, it did not increase significantly compared with 2009.

As early as 2012, Septwolves' operating income reached 3.477 billion yuan. In 2023, its operating income was 3.445 billion yuan, with no significant growth.

Data shows that Septwolves has encountered a growth bottleneck since at least 2012.

Of course, China's apparel industry has experienced several cold winters, including 2013 to 2016 and 2020 to 2022, but Septwolves has survived and demonstrated strong market competitiveness.

On June 18 this year, Septwolves held a flag-raising ceremony in Jinjiang Jinjing Industrial Park to celebrate the brand's 34th birthday. Zhou Shaoxiong said in his speech that under the guidance of the wolf spirit, Septwolves has forged a more tenacious and calm team, and will remain committed and take steady steps to meet the challenges of the new era with a more mature and confident attitude.

In June this year, the "little princess" Ding Jiamin (Ding Shuibo's second daughter) of the Xtep Group and Zhou Liyuan (Zhou Shaoxiong's second son), the second son of Septwolves, held a wedding, sparking heated discussions about family marriages.

How will the three Zhou brothers and Seven Wolves break through the bottleneck of performance growth and enter a fast-track of development?