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Written by | Sun Yue

recently,TrumpTrump and Musk, two top political and business figures, had a rare live broadcast and talked to each other for two hours, but the focus of the onlookers was on the back of Trump's phone, which was an Anker magnetic power bank from China.

"King of Understanding" endorses the parent company behind Anker Power Bank——Anker InnovationsIt was at the forefront of the stock market, with its share price jumping nearly 3% and its market value exceeding 28 billion yuan (its highest market value in history was 70 billion yuan). However, many people in China are not familiar with this Changsha-based company, because it is a "hidden champion" that went overseas in the early years and quietly made money from foreigners.

Looking at the topics that have become the focus of Chinese investment in recent years, they can be new energy vehicles, robots, and AI, but there is absolutely no "power bank". According to the jargon of the investment community: there is no technical threshold, and there is no story imagination.

The only thing that is barely related to this is the shared power bank that emerged in 2014, riding on the popularity of the concept of "sharing economy". However, the power bank itself is more classified as a physical manufacturing industry of consumer electronics.

However, it is such a shabby track that is looked down upon by various financiers, but it has produced a listed company with a current market value of over 30 billion yuan, annual revenue of over 17 billion yuan, and net profit of over 1.6 billion yuan.

What is even more mysterious is that 9 out of 10 Chinese people may not know the name of this company, but on the streets of North America, Europe, and Japan, when talking about power banks, many people may mention "Anker". This is simply because it is popular both inside and outside China.

In the "China Cross-border E-commerce Brand Influence Ranking" in the first half of 2024 released by "Daily Economic News" and others, Anker ranked second, second only to the overseas devil SHEIN.

The founder behind Anker Innovations (hereinafter referred to as "Anker") is a boy from Changsha, Hunan, named Yang Meng.

We can use labels such as "post-80s academic master", "Silicon Valley elite", "side job youth", and "smart entrepreneur" to outline his different sides.

In late summer of 2011, Yang Meng, born in 1982, quit his job as an algorithm engineer at Google and returned to his hometown in Hunan to start his own business. He later became the founder of Anker.

He doesn’t appear on TV very often in China, and Yang Meng lacks public recognition. However, another post-80s entrepreneur, Chen Ou of Jumei, spent 300 million yuan to acquire the shared power bank brand “Jiedian” from him in 2017, which became popular. At that time, Wang Sicong scolded Chen Ou, “He will be mad if (shared power banks) can succeed.”

Yang Meng was born in a working-class family in Changsha. After studying, he had a smooth journey. After graduating from Changsha Yali High School, he successively obtained a bachelor's and master's degree in the Department of Computer Science at Peking University and the Department of Computer Science at the University of Texas at Austin. During this period, he received scholarships many times and was a veritable academic master.

In 2005, after graduating from UC Austin, Yang Meng went to Google for an internship and later became a full-time employee. In the next five years, Yang Meng grew into a senior search engine engineer due to his outstanding work performance, and won Google's highest award, the "Founders' Awards" (used to recognize outstanding employees), achieving a class leap with an annual salary of one million.

Yang Meng has all the labels that workers want, such as Fortune 500 companies, high salary, and wealth, but "Silicon Valley elite" is not his destination.

During his time at Google, Yang Meng's "side business" was in full swing. According to reports, Yang Meng built a website that automatically crawled online products and imported them into Amazon for distribution, and then used his best SEO algorithm (complying with platform rules to make his content appear in front of users) to increase traffic. He didn't have to do anything himself, just facilitated the transaction, and he sat in the office and "received" a million dollars, which was more than his salary at Google.

This is a bit similar to some people in the workplace today, who, while working on PPTs with their bosses in the office, open a "no-source store" on a domestic e-commerce platform, but they only earn pocket money.

In 2011, Yang Meng began to transform into an entrepreneur. The opportunity came when Yang Meng wanted to replace the battery for his computer, but found that on Amazon, the original battery cost as much as $70 or $80, while the unknown brand battery was only $20. Due to the low ratings, not many people dared to buy it.

In the price difference, Yang Meng discovered the business opportunity of "rechargeable batteries" - in modern industry jargon, it is called "domestic substitute".

That year,Yang Meng first officially registered the global brand Anker in California, USA, which is a German word meaning "anchor".Then he returned to Changsha and registered the predecessor of Anker Innovations.

In Shenzhen Huaqiangbei, there are many electronic consumer products with good quality and low price. What Yang Meng needs to do is to come here from Changsha first, find products with price lower than 70 or 80 dollars, but with higher quality than the cheap brands, to capture American users, which is similar to the business of a middleman.But becauseBy seizing the opportunities of cross-border e-commerce and the actual demand of overseas markets, Yang Meng made a new fortune in his life.

But he knew that OEM was only the first step in Wanli's entrepreneurship, and he must do independent research and development.

Nine years later, Anker was listed on the Shenzhen Stock Exchange in 2020. Today, it is already a diversified enterprise, but if we only look at the revenue of "charging energy storage products", there is still a revenue plate of 8.6 billion, accounting for 49.14% of Anker Innovation's total revenue of 17.507 billion in 2023.

Moreover, in the past 10 years, Anker Innovations, whose main business is charging products, has almost never seen a decline in revenue and has been growing.

Anker's sales market is mainly overseas. According to the 2023 financial report, Anker Innovations' overseas revenue accounted for 96%, including 47.81% in North America, 21.02% in Europe, 14.2% in Japan, 5.19% in the Middle East, and less than 4% in China. It is a standard Chinese company that is well-known overseas but unknown in China.

So, how did Anker create a trend for an inconspicuous power bank?

It may be understandable that investors look down on the power bank industry.

According to industry data, there are currently more than 2,600 power bank companies in China, with an industry output value of RMB 12.6 billion in 2023 and RMB 40 billion in 2029. It is indeed a relatively small industry.

Let me interject here that the power bank is said to be an original invention of the Chinese.

There are two recognized "Fathers of Chinese Power Banks" in the industry. One is Sun Zhongwei (born in 1978) from Shandong, who graduated from Shandong University of Technology; the other is Zhao Guocheng (born in 1969) from Sichuan, who graduated from Southwest University. Both have made achievements in the field of mobile power. There is a story that the three words "power bank" were accidentally called out by a merchant in front of Zhao Guocheng and are still used today.

Looking back at Anker’s entrepreneurial history from its founding in 2011 to now, which has lasted 12 years, there are two “noble men” who have played an important role in Anker’s development during the company’s career.

One is the abstract "noble man", that is, he relies on the lower overall cost of China's manufacturing industry.

As long as they rely on China's industrial chain, all Chinese products exported overseas are more likely to have certain price competitiveness in the international market. This is also one of the reasons why Trump continued to impose tariffs on Chinese exports when he was in office. He believes that Chinese products are sold well in the United States and earn a lot of foreign exchange.

The term "China's lower overall manufacturing costs" was recently mentioned by Huang Qifan, the former leader of Chongqing, in several speeches. He believes that over the past decade, a unique phenomenon has emerged in the market: products "made in China" are sold around the world, and the cost can be reduced by 30% or even 50% compared to international counterparts.

For example, the shield machines used to dig subway tunnels were imported from Germany, Japan and other countries in the 1990s, and each cost more than 100 million US dollars. After 2010, China unlocked the shield machines and adopted domestically produced ones. Now the global shield machine costs 5 million US dollars each.

The reason why China can keep the overall cost of manufacturing at a relatively low level is that China is a large market with integrated production and sales. Once the various costs of research and development and sales of enterprises are spread over the huge market, the end products will become price competitive.

Let's go back to power banks. The core raw material of power banks, which accounts for half of the cost, is called a battery cell. Most power banks use lithium batteries, and battery cells are the core component of lithium batteries. my country's lithium battery production capacity accounts for more than 75% of the world's total. Whether it is production or commercial manufacturing, it has advantages in the world, and the same is true in terms of cost. This is also the reason why my country's lithium battery-related industries rank among the top in the world. This is the industrial background.

At the same time, my country is also not to be outdone in manufacturing. When Anker first started its business, it used the OEM model, which means that it took advantage of the lower production costs of Huaqiangbei to produce high-quality and low-cost Chinese products and sold them in the United States at a price of US$30-40, successfully deconstructing the "pricing mentality" of American original batteries that were often US$70 or 80. To put it bluntly, it was only later that the Americans discovered that rechargeable batteries could be "good and cheap" at this price, and they didn't have to spend so much money.

This is a bit similar to the entrepreneurship of Luckin Coffee. When international giants told everyone that a cup of coffee at 30 yuan was natural, Luckin Coffee used the cost of the Chinese industrial chain to make coffee at 9.9 yuan, successfully deconstructing the pricing power of the original coffee giants and cultivating a new coffee consumption mentality among Chinese users - that coffee can be cheaper than 10 yuan, and it is still drinkable.

Even now, Anker has adopted a self-research model, and its production is still completed through a collaboration model with external factories in China. As long as it is produced in China, it will be competitive.

Data show thatAnker power bankThe cost price in China is about 50% lower than that in the United States. For example, the same power bank as Trump's is sold for 399 yuan in China and 700 yuan in the United States. This is due to both the difference in pricing and the cost difference between the two places.

In fact, this kind of product category that is popular overseas by taking advantage of Chinese costs is very obvious in the recent e-commerce overseas boom. From Shein to Pinduoduo's Temu, as well as other electronic consumer products such as sweeping robots and floor scrubbers, most of them follow the same model.

Another "benefactor" of Anker should be Apple.

Between 2018 and 2019, Anker's data cables successfully passed Apple's MFi (Made For iPhone/iPad/iPod) certification, making Anker the industry's first charging brand in mainland China to be sold on Apple's official website and official stores.

The background at that time was that one year later, major mobile phone manufacturers including Apple gradually cancelled the free gifts such as mobile phone chargers. Anker, which passed the MFi certification, undoubtedly stepped into this blank market. In other words, the number of people who bought Anker charging products would be linked to the number of Apple mobile phones sold.

In the three years from 2019 to 2022 alone, Anker Innovations' charging and energy storage products grew from 5.5 billion to 6.8 billion and 8.6 billion. Of course, this is also due to the addition of revenue from new products such as household photovoltaics.

The MFi certification obtained by Anker undoubtedly provides it with the ability to gild its brand. It should be noted that the pass rate of this certification is only about 2%, and each brand has a maximum of three testing opportunities.

Behind the gold-plated brand is a premium. It is reported that a data cable that has completed MFi certification has a premium of about 15 yuan. In this context, the price of Apple's official charger is 159 yuan, the average price of ordinary chargers on the market does not exceed 50 yuan, and the Anker charger endorsed by Apple is priced at 119 yuan.

totalofFrom our perspective, relying on the Chinese industrial chain and embedding into the international sales system is the only way for Anker to succeed.Of course, we cannot ignore the huge role of entrepreneurs.After all, entrepreneurs are the soul of an enterprise.

In the field of consumer electronics, there is a model called the "shallow sea model". It refers to a strategy in the consumer electronics market that focuses on a niche market or category and achieves success in a specific field through intensive cultivation and precision marketing. Anker Innovations is considered a successful representative of this model.

However, power banks are not high-tech products and can be easily imitated and surpassed by other similar competitors in the market. Therefore, since 2016, Anker Innovations has also begun to implement a diversified product strategy to improve the company's competitiveness.

Today, Anker has six major product lines in three fields. The three fields are charging and energy storage, smart audio and video, and smart innovation. The six major brands are Anker, eufy (including smart home brands such as sweeping robots, smart scales, and smart bulbs), soundcore (soundcore, an audio equipment brand, mainly headphones), Nebula (portable projector series), AnkerWork (mainly engaged in smart office fields such as speakers, cameras, microphones, etc.), and AnkerMake (mainly 3D printers).

Due to the growth of these new categories, the revenue share of charging and energy storage products represented by Anker chargers has dropped from more than 70% in 2007 to about 50%. On the contrary, the share of smart innovation products such as Soundcore has increased to 25.95%, and the share of smart audio and video products has increased to 24.48%.

Of course, Yang Meng has made mistakes in the process of diversification. In 2021, Anker Innovations' revenue exceeded 10 billion for the first time, completing its early shallow-sea strategic goals, and trying to become a more heavyweight company by expanding into more subdivided categories.

To this end, Anker established a total of 27 product teams including energy storage, lawn mowing robots, and 3D printing, and the company's number of employees expanded from 1,600 to 4,000. However, after two years of multi-field layout, more than 10 product lines had to be closed.

In a recent media interview, Yang Meng summarized the reasons for his failure. In terms of products, "When the product bottlenecks are not broken through, it is manifested as a large-scale failure to win"; in terms of personnel, "Putting people first and then things is a painful understanding in category expansion. Only by finding creators can we win in fierce competition."

He hopes that such creators have the three elements of "first principles, pursuit of perfection, and common growth". First principles means "being good at starting from the essential principles of things, building upwards, and discovering the direction of breakthroughs"; pursuit of perfection means that creators must withstand risks, try every possible way, and pursue the spirit of breakthroughs; common growth means long-termism, continuous learning, self-awareness, and self-evolution.

Yang Meng does not deny that Anker is currently a second-rate company, but it has more and more room for development.

In 2021, Anker announced its return to the domestic market. At that time, Anker's domestic business revenue accounted for only 2% of its total revenue. Currently, the domestic business is close to 4%, which has increased but not significantly.

For general global brands, the Chinese market usually accounts for 15-20% of their revenue. In the involutionary domestic market, whether Anker can replicate its successful overseas experience and achieve "export to domestic sales" will test the ability of this hidden overseas champion to play in both domestic and international markets.

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