How To Achieve "Three Level Jump" In "Doctor Frog"

　　 Spin The industry is Shanghai's "mother industry". In the 80s and 90s of last century, foreign trade garment manufacturers were also flourishing. As labor costs rise, raw materials prices rise and market competition intensifies, foreign trade foundry is becoming more and more difficult in Shanghai. When the financial crisis struck, weaker foreign trade processing enterprises immediately dropped one.

Dr. frog, this once. foreign trade A member of the OEM, after several active innovations and transformation, has now become the world's largest consumer consumer product developer and retailer with a market value of HK $15 billion.

How can a doctor's frog margin transform smoothly? What can this sample do for private enterprises to become stronger and bigger and how to enlighten the development of Shanghai's urban industry? With these questions, reporters walked into Boshiwa International Holding Limited.

First jump: from foreign trade to foundry. obm

Investigation record: Shanghai Waigaoqiao Free Trade Zone, there is a 10 storey factory building, the doctoral frog headquarters is located here. The chairman and CEO of the company's board of directors, Zhong Zheng Yong, manages a foreign trade processing enterprise for children's clothing, Shanghai Rong Chen group. "At that time, the policy was export oriented, and it was a glorious thing to do foreign trade." In the late 80s and early 90s of last century, Rong Chen continued to make orders throughout the year, and gradually exported products to Japan, Australia and so on, earning tens of millions of dollars each year for the country's foreign exchange earning. Speaking of the scene of the year, the teacher in the factory proudly said, "except for cotton processing, spinning from spinning to weaving and dyeing is Allah doing it himself."

By 1996, the export volume of Rong Chen reached tens of millions of dollars, but Zhong Zheng Yong had already felt the pressure: RMB appreciation and raw materials rose, and foreign trade prospects were not optimistic. Moreover, foreign children's wear brands also began to enter the domestic market, which prompted Zhong Zheng to start thinking about creating brands to open up the domestic market.

This year, the brand of frog frog was formally founded. After that, a series of children's clothing products were launched, and sales counters were set up in department stores in all parts of the country. At the same time, foreign trade OEM business has been cut by half. This can be regarded as the "first jump" of doctor frog.

One of the revelations: making low end manufacturing, the road will be narrower and narrower.

Do foundry, do not have a heart to think of brand, as long as the order, buried processing on the line. It is a great courage for a frog to transform itself from a foreign trade agent to a self created brand.

Zhong Zheng used to visit Japan several times, and he found that the price of children's clothes sold by himself was several times higher than that in Japan. Children's clothing companies visiting Japan do not see factories, they only see design rooms. Japanese enterprises focus on two points: R & D design and brand marketing, which are the two ends of the smile curve, with the highest added value. Foreign trade is the lowest value added part. Zhong Zheng concluded from this conclusion: "only 10 years' way out is to make a manufacturing effort. If there is brand, design and sales access, then there will be 30 years to eat. "

In the eyes of Zhong Zheng, this is the difference between the low end manufacturing industry and the modern service industry: "what the low-end manufacturing industry does is to see what is done, and to produce according to the drawings drawn by others; what the modern service industry is doing is invisible, and it is entirely created by itself." In those days, foreign trade foundry was very prosperous, making money easy. Who would like to give up what was available and start from scratch? Zhong Yong uses this vision.

Second hop: from single brand to multi brand

Investigation record: in the process of promoting the brand of "doctor frog", Zhong Zheng discovered the brand of children's clothing such as Mickey Mouse and Garfield, not only did they have movie and TV animation, but also derivative products. So he found publishers, published the "little frog newspaper" jointly, announced the investment of 10 million yuan, asked the Shanghai art film studio to make "the best animation in the world".

These creative ideas in the year made Dr. frog appear on the front pages of several big newspapers. Unfortunately, determination and investment do not necessarily bring rewards. In the mid 90s of last century, domestic animation was still an expression of "havoc" and "three monks". It was flooded by imported animation from Europe, America and Japan.

This stage is the most difficult moment for doctor frog. The transformation seems to be turning to a dead end: private brand can not open up sales, department stores need special investment counters, and workers are waiting for wages. A bosh frog employee told reporters: "the boss has no entertainment, and stays at the company until two o'clock every day." Dr. frog supported the entire company by retaining part of the foreign trade subcontracting business.

Therefore, Zhong Zheng is thinking about the transformation again. In 2005, Dr. frog authorized the Warner Bros. Harry Potter brand to develop, manufacture and sell children's clothing and accessories at the age of 4 to 14. More than 200 kinds of products have been designed by Dr. frog, and they are popular in the first place. Zhou Yiting, director of the design of doctor frog, told reporters that almost every child after watching the film dreams of wearing Harry Porter's clothes and drinking water from Harry Potter's cup. In August 2006, the doctoral frog authorized the prince of tennis. In just 2 months later, the first design product went on sale in the eleven golden week. The parents bought the queue with their children and sold 2 million yuan a week. Since then, Dr. frog has signed international brands such as NBA, Barcelona, Juventus and Manchester United. From single brand to multi brand, it becomes the "second jump" of doctor frog.

Revelation two: only by finding a business model suitable for the Chinese market, can the self created brand develop further.

Dr. frog wants to learn Mickey Mouse, but this road is not accessible in China. Without the cartoon character of movie and TV, Dr. frog spent great efforts in product design. According to Chen Liping, executive vice president and chief operating officer of Dr. frog, "in 1997, the doctor frog introduced Japanese designers and made a yearly salary of 500 thousand yuan. In 1998, he hired a designer from the French Alain Delon team to teach. Despite the fact that design concepts and techniques have been comparable to international brands, the sales of PhD rankings have been very mild.

What kind of business model can China's local brands that support children's products? Zhong Zheng spent 9 years thinking about it, and gradually realized that the self created brand should not be alone. It must be done together with the international authorized brand so as to open the sales channel, expand the store by expanding rapidly, and expand the influence of the self created brand.

There are two key points in this business model: first, the doctoral frogs do not sell the mature international brands such as Nike and Adidas, but seek the authorized brand of the popular international blockbuster or anime image. There is no pricing power, nor can we learn anything. Licensing is the design, development and sale of derivative products by the doctor frog. It is completely autonomous, and the authorization fee is not as expensive as it expected. Two, once the authorized brand is found, there is no competitor in general, and the profit is used to nurture the brand and make the market bigger. {page_break}

Third hop: from upstream to downstream, focus on channel construction.

Investigation record: brand is not worried, the channel has become the key. The gross profit space of traditional department stores is very small. Zhong Zheng decided to open an independent store simultaneously.

Zhong Zheng used to be in the Akachan365 baby store in Japan, and saw that he was rich in children's products, which made him able to achieve one-stop shopping. In 2004, the first doctoral frog 365 life hall opened in Shanghai port Hui square, selling more than 3000 products including children's clothing, baby care, children's daily use, etc., and parents do not have to run many stores to shop.

The 365 life hall of PhD frog has been copied to all parts of the country, and its annual sales growth is over 20%. At the same time, with the help of new technology and new media, the PhD frogs have launched new formats such as online shops, street shops, main stores and so on, so as to form a clear and three-dimensional sales channel.

In 2008, before the financial crisis, due to the soaring price of raw materials, Zhong Zheng made bold decisions to sell all the production plants of the frog, focusing on product design, brand cultivation and channel construction. The first anti - OEM mode was registered, and the "Baby2" brand was registered in Japan, which commissioned the Japanese enterprises to process and re sell the Chinese market. Dr. frog's "third jump" completely transformed from manufacturing to "light assets" company.

Since then, the frog has driven onto the fast lane. In September 29, 2010, Dr. frog became the first listed enterprise in the domestic consumer goods industry in Hong Kong. According to Lv Yihao, chief executive officer of doctor frog, the total income of doctor frog increased to 1 billion 410 million yuan in 2010, an increase of 123.5% over the same period last year, and net profit of 251 million yuan, an increase of 106.9%. Multiple brands and multiple channels bring multiple profits.

Revelation three: to the high end of the value chain is the inevitable choice for Shanghai enterprises to solve the high cost of business.

When the financial crisis struck, the doctor frog became bigger and stronger. He boldly cut off the manufacturing business, and focused on designing research and development and channel construction like Japanese companies. In a city with high cost of Commerce in Shanghai, it does not want to be crushed by costs. It is an inevitable choice to go to the high end of the industrial chain and earn high added value.

According to a press survey, the business income of PhD frog manufacturing in 2007 accounted for 55.8% of the total revenue, gross profit margin was 17.6%, and the gross profit margin of manufacturing in 2008 was only 3.5%. After cutting off manufacturing business, the gross profit margin of PhD rose to 44.4% in 2010. Let's say goodbye to the low-end manufacturing that started on the market. Zhong Zheng used to say: "the energy of the enterprise is limited. We should shift our focus to a more strategic sales channel. This is what we do and what we do not do.

In fact, the establishment of the 365 life hall and main store of PhD frog has greatly enhanced the ability of enterprises to control channels. At the seventh China International Animation and game fair, which was just closed, Japan's multi toy manufacturer announced that it would enter the sale of PhD frog channel. Up to now, the doctor frog has taken more than 10 general agent and the total distribution of the original imported famous brand maternal and infant supplies. Thanks to the core competitiveness of the three aspects of brand, design and channel, the frog realizes the "Phoenix Phoenix" from the foundry enterprise to the largest consumer goods developer and retailer in China.

Can Shanghai produce more "doctor frog"?

Reporter's notes

In the interview with Dr. frog, reporters often think of a question: can Shanghai produce more "doctor frog"?

In the era of planned economy in the last century, Shanghai's clothing and light industrial products went all the way and produced many famous brands. However, when the market economy surged, most of these brands disappeared. Dr. frog was born in Shanghai and became Shanghai. Now it has gone to the whole country and is expanding overseas. It shows that this soil in Shanghai still produces nutrients for the famous brand of urban industry.

Without the use of Zhong Zheng, there would be no doctor frog. Just like Apple's Jobs, Lenovo's Liu Chuanzhi and Alibaba's Ma Yun, behind a successful company, there is an important entrepreneur. Especially in the fully competitive consumer goods industry, entrepreneurs can play an indispensable role in the field of private enterprises.

In Shanghai, most of the policies of industrial guidance and agglomeration are designed for enterprises, such as venture capital, financial subsidies, policy discount, listing incentives, etc., which are less customized for entrepreneurs. But for the policy of leading talents, most of them are domestic and foreign talent introduction schemes, and less consider the cultivation mechanism of local entrepreneurs. It is important to attract talents at home and abroad, but how can we let the "foreign monks" read the classics without a lot of local entrepreneurs?

Fundamentally speaking, policies do not foster entrepreneurs. Only by beating the market, can we cultivate real entrepreneurs. Shanghai has a mature mechanism in selecting and training leaders of state enterprises, and most private entrepreneurs are basically "barbaric growth" before they become famous.

It can be seen that government departments as policy makers, industry guides and market managers should be able to create more suitable policies and market environment for the growth of "doctor frog".