Xu He: Perseverance Will Eventually Become China'S Hard Shell Suitcase.

It is said that Wenzhou people are Jews in the East. The popularity of the TV drama "Wenzhou family" has made people understand more about the hardships behind Wenzhou entrepreneurs.

Xu He is such a warm businessman. He is never willing to be in the status quo. He started with a few soil machines. Then he left his bags and developed relatively mature Wenzhou, and came to Pinghu with a hard box. After losing a lot of losses for a long time, he finally turned a profit. Now the company has stabilized, but he is actively thinking about pformation.

Reporter: there are 3 brothers and 3 sisters in your family. How did you get along with your family when you were little? What's the impact of this experience on you?

Xu He: when I was little, my family was very bad. I was born in a village in Ruian, Wenzhou. My parents were farmers. I was the youngest child in my family.

Wenzhou mountain is many, our family 9 people, only 1 acres of land, often have no food to eat.

At home, I graduated from junior high school. I didn't go on studying again. I went back home and started farming. I went back to the West for four or five years.

In fact, before the reform and opening up, Wenzhou's economy has been bad, everyone is poor, "poor is changed, and change is connected". After the reform and opening up, Wenzhou people began to do business, starting from the smallest and least obvious business, playing cotton, shoes and so on.

In 1985, when I was in my twenties, I also started business.

At that time, there were streets in Ruian and stalls on both sides of the street. We call them "walking and private" because the goods there were "go and private", and I sold the handbags from Taiwan in "walking and private", and a briefcase could earn tens of dollars.

It was very hard at that time, and I got to get up at 4 in the morning, sleep at the floor shop in the evening, and avoid the tax officials.

In doing so for 5 years or so, I accumulated about 300000 yuan of funds and laid a foundation for my future development.

Reporter: when did you start making bags? What was the market environment then?

Xu River: in 1992, I was in partnership with my eldest brother. I found 3 houses in a village in Ruian, set up the Okuda Li bag factory, and began to manufacture hard case suitcases. This is the first luggage factory in Ruian.

That place is 15 kilometers away from downtown Ruian. It is not accessible to cars, except for tractors, except for bicycles or feet.

The machines we use are very earthy and there are twenty workers.

I didn't know anything at that time. Suddenly, one day, the tax officials came to us and asked us to pay taxes. We didn't even know that the factory was to pay taxes.

In 1996, our new plant opened and applied for the "Huashi" brand and made the pull rod box. Until the exit, the performance was good, with an annual turnover of nearly 5000.

000 yuan, ranking in the luggage industry is also relatively high, the price can be more expensive than other expensive twenty or thirty yuan.

Reporter: since you have developed very well in Wenzhou, why did you choose to come to Pinghu?

Xu He: at that time, Pinghu was inviting investment. A friend who was an enterprise in Pinghu introduced us here. We thought it was suitable for all aspects, and decided to develop here.

In 2005, the "Ginza" of Pinghu was formally put into operation.

At that time, the luggage industry in Wenzhou had developed relatively mature, and there were more hard cases in Wenzhou. However, in Jiaxing, only "Daily" brand bags were hard cases, others were soft boxes, and at that time, "everyday" had already closed down. It can be said that in Pinghu, the hard box area is blank.

Reporter: How did Ginza operate in Pinghu?

Xu He: when I first arrived in Pinghu, I was very uncomfortable. In Wenzhou, most of the products were sold domestically, but in Pinghu, most of them were foreign trade.

However, we are totally unfamiliar with foreign trade and have no customers. Therefore, from 2005 to 2009, we have been losing money for a number of years, and the loss has reached about 20 million yuan.

And when the factory building was built, the contractor broke about 2000000 yuan and ran away.

Customers need to be cultivated slowly. Through the introduction of foreign trade companies and Pinghu friends who make soft boxes, customers will get more and more in the second half of 2008. At this time, my heart will be bottomed out, and from 2008, the hard box will become popular. I know that the company will make profits gradually.

In 2010, the company finally began to make profits.

Even at the time of the most serious loss, I never thought of giving up. Wenzhou people may be born with a spirit of never giving up.

But this is not blind confidence. I am fully prepared for all this.

Even if a fully mature company has changed its place and traded a trade mode, it must have been losing at first. There is always an adjustment period.

Before 2010, although the company did not make money, there were still many people who wanted to join the stock market.

Reporter: "Ginza" started with foreign trade, but faced with the present situation.

The decline of the situation and the pfer of industry, how do you think we should expand the broader market? Where is the future of "Ginza"?

Xu River: We used to be the main foreign trade company, but in 2010, we identified the idea of developing domestic sales, and formally implemented it in 2011.

At present, the labor cost is getting higher and higher in China. Many foreign manufacturers have pferred labor-intensive industries to Vietnam and other places, leaving our profit margins smaller and smaller. Moreover, the channels relying solely on foreign trade are too simple. If one day, foreign businessmen do not give us the list, we can only wait for death.

In addition, the domestic market is actually the largest market in the world, but it has not been made good use of, and the potential for exploitation is still great.

According to the current data, the number of tourists traveling every year is over 100 million. There will be much room for future tourism in China.

And every year, college students have to drag their suitcases to school, and more and more gifts are sent to the suitcase.

According to statistics, China's annual sales volume of suitcases reaches 150 million.

At present, the domestic market accounts for 20% of our total sales.

Our goal is to raise this figure to 60% in the near future.

Reporter: how are you going to open up?

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Xu River: in general, it is to establish brand.

In the global economic downturn, the sales of suitcases were also affected, but some famous brand boxes, such as Samsonite, diplomats and so on, were basically unaffected.

To this end, in addition to positioning in the high-end "Ginza", we applied for another trademark, "Alps", located in the high-end.

In terms of specific brands, we will take the way of online and offline synchronization.

Online, we have a dedicated E-commerce Team in management, the brand ranking in Tmall has been rising year after year, and now remains in the top five.

Below the line, it focuses on small cities such as the three tier cities and county towns, so as to become the most high-end travel bag brands that can be bought locally, so that they can feel their face whether they use them or give them away.

I plan to set up a point in the high-speed rail station in the big city, where I must lose money, but its purpose is to show the image and impress the tourists.

In this way, customers return to their small cities and find that small towns also sell bags in big cities and are naturally willing to buy them.

However, like the situation when we first arrived in Pinghu, earnings need a process, so far, our domestic sales have not yet been profitable.

Reporter: what channels do you intend to develop through domestic sales?

Xu He: whether online or offline, we are now developing through distributors' mode, and will continue this way in the future.

At present, there are about 200 distributors, but there are less than 30.

Our distributors, especially online distributors, hardly need to take any risks.

The inventory will be borne by us, the goods will be sent directly from us, and any after-sales service of the products will be settled by us.

Last year, our inventory reached 70 million yuan.

Reporter: "Ginza"

From scratch to the stability of today's cat ranking in the top five, can you share with us the experience of doing electricity supplier?

Xu River: we started to do business in August 2011. At that time, there was no Tmall, just an ordinary Taobao store. In just 11 months, it achieved two crown from zero, which is one of the best in the industry.

In August of this year, we sold 26 thousand bags and sold three thousand or four thousand at most.

We are all halfway through Taobao, which is not professional at all. When it comes to experience, we can only say "steadfast".

After sale, we must follow up in time. There are many bags. It is inevitable that there will be individual damage. If the parts are broken, we will send and teach the consumers how to replace them at the first time. Even the offline stores, we also have this service, and truly achieve the "National joint guarantee".

Next, we need to develop more channels and extend our products to Jingdong, suning.com, Alibaba and many other B2C and B2B websites, and will also be on the website for foreigners.

Reporter: I heard that you are a shareholder of Pinghu luggage and bag city. What do you think is the significance of luggage city to Pinghu?

Xu River: Guangzhou's luggage is very famous because it has a market of flower bags and bags. Hebei's bags are also famous because they have wholesale markets for Baitou bags.

Our geographical advantages are no less than those of the two regions, and we can do better.

Pinghu's luggage and bag industry is developed, but the corresponding supporting market is not perfect. If we have such a comprehensive luggage market such as box City, then our production efficiency will be greatly improved. The original sample will take half a month, and if it is complete, it will only be completed in 1 days.

The scale benefit brought by the luggage city can radiate the whole Yangtze River Delta region and drive the luggage industry in the Yangtze River Delta region.