Dialogue With Chen Guangmin, Chairman Of Dadong Footwear Industry, Exploring The Development Of Dadong In The Past 20 Years

A few days ago, party secretary Chen Weijun emphasized in Ruian that we should work hard to build a new platform and work hard to cultivate and develop new industries, new formats and new modes, so as to accelerate the formation of new competitive industrial clusters.

We should strive to cultivate new kinetic energy, lead the increment by digital economy, promote the stock optimization with the integration of two technologies, and rejuvenate the old ones.

Zhejiang Dadong shoe industry Co., Ltd., headquartered in Ruian Luo Feng Industrial Park.

A few days ago, party secretary Chen Weijun emphasized in Ruian that we should work hard to build a new platform and work hard to cultivate and develop new industries, new formats and new modes, so as to accelerate the formation of new competitive industrial clusters.

Efforts should be made to cultivate new kinetic energy, lead to incremental growth in the digital economy, promote the stock optimization with the integration of the two technologies, and revitalize the "old foundation" so as to let the "new vitality" emerge.

Wenzhou is the "shoes capital of China".

As an advantageous traditional industry, shoe industry is the "old foundation" of Wenzhou.

Chen Guangmin, chairman of Zhejiang Dadong shoes industry Co., Ltd., in the 23 year, sticks to the main business of shoemaking, deeply plows the real economy, continuously carries on the business mode self pformation and innovation, and actively embraces "Internet +", and the enterprise has made good and fast development, so that the "old foundation" has been continuously emitting "new vitality".

It is worth learning and learning from exploring the advantages of traditional industries.

The domestic women's shoes market has been surging in recent years. "Boss" BELLE has been delisting, and the "Daphne" performance has changed sharply.

Outside rumors, Dadong, Zhuo Shi Ni, kraft and a number of Wenzhou fashion women's strong rise, "kill" BELLE and Daphne.

Why has the "silent" big Dong, who has always been "silent", has been so miraculous and overbearing? What big moves have it made in recent years after opening more than 8000 stores in the country? How did big east take the lead in achieving the "zero inventory" of every quarter? What is the "14 day fast fashion" for leading domestic footwear enterprises? How is it successful? How will we create the "7 day fast fashion"?

In late August, our newspaper reporter (hereinafter referred to as "Ji") came to Zhejiang Dadong shoe industry Co., Ltd., located in Luo Feng North Industrial Park, Ruian, and held a deep dialogue with Chairman Chen Guangmin (hereinafter referred to as "Chen"), trying to decipher the "big east mode" to explore the secret of the development of the company over the past 20 years.

23 years since its start, it has been sticking to the main business of shoemaking.

In 1995, Chen Guangmin, 25, began making shoes and stepping into the shoe industry.

This year, the shoe industry in China is suffering from all kinds of wars.

In Wenzhou, bully, 66 Shun, and Bao Bao are known as shoe giants, and have gained considerable popularity nationwide.

More than ten years later, Buli and Bao Bao collapsed and disappeared.

This year, Jin Bo founded the red dragonfly, and Dan Zhimin founded her.

Reporter: you will be full of curiosity about your entrepreneurial process.

Chen: I was born in 1970 and grew up in rural areas.

At the age of 17, he had been a shoe apprentice for a year.

Then I went out with my cousin to keep bees.

From Yunnan to Sichuan, Jiangsu, Anhui, Shandong, and then to Inner Mongolia...

Every year, according to such a route, follow the flowering period and run around the country.

At that time, I joked that I was doing "sweet business".

Three years later, my family asked me to come back to find a girlfriend and get married.

I came back and sold shoes wholesale in Wenzhou.

Three years from south to north, I have gained insight and vision.

When I came back to sell shoes, I felt that I had some foundation.

I sold shoes for a year in Wenzhou. In second years, I opened a store in Zhengzhou and later set up an office to sell shoes. At that time, I opened four stores in Wuhan, Shijiazhuang and Beijing.

So, I have been doing shoes since I was 21 years old (1991).

In 1995, I set up a shoemaking workshop in my home yard, and five or six people began to work.

The boss is the employee, the boss is the financial.

In those days, we finished the sample and style in the small workshop, and then we went to the market.

With orders, take it back and do it again.

The men's shoes will be changed into women's shoes, and the first barrel gold will be excavated.

In Wenzhou, there are usually three types of boss's origin: the first is to run the market for marketing, the other is to run a shoe factory, the second is from a worker to be a boss, and the third is shoe designer to be a boss.

And Chen Guangmin seems to belong to fourth kinds. He has been a shoe apprentice, knows production and keeps bees for three years. He has seen all over the world understand the market and sales, and he knows the R & D design. His sensitivity and insight to the market is undoubtedly very strong.

Reporter: when did you get the first real "big bill" at the beginning of the business?

Chen: if you want to ask which is the most successful, I think it's a 1995 order for shoes.

At that time, the "lucky birds" of Fujian Shi Shi had a men's bag shoes, which sold very well.

When the shoe came out, I went to imitate it and creatively changed it into women's shoes.

Surprisingly, sales were very good, almost two years in a row.

Of course, we are also copied by many people.

This is the "first pot of gold" that I have earned. It gives me great inspiration to be the first.

We are the first shoe of this category.

Actually, making shoes is not complicated, but many people didn't dare to be the first ones.

If we make shoes and sell anything, I will develop anything.

I always believe that the way of development, production and sales must be communicated. To understand the market, we must understand the design and understand the cost.

A pair of PU leather shoes with a cost of 40 yuan, if used at present.

The general "company - the provincial agent - Dealer - consumer" model sales, retail prices to 300 yuan, the store dealers may be rich.

Its disadvantage is that the sales of the company do not go and restrict the rapid development of the enterprises. The agents and distributors make money difficult, and the consumers should spend more "unjust" money.

But Dadong innovation "remove the middle link, the company unified pricing" this model, "dry is a professional brand, only sell the price of goods", high price ratio for the big East won a broad space for development.

Reporter: in 2008, Dadong was pformed into a chain Monopoly from the original wholesale agent system. How did it decide then?

Chen: we pformed in 2008 and took the direct selling mode.

Why do we need to change? Because the original agency sales mode has to sell the shoes at different levels, and the price is too high for the consumers.

Dadong wants to create "high quality and low price" shoes for consumers.

Before 2008, Dadong implemented the provincial agency system.

For example, a pair of cost 40 yuan.

The sale to the provincial agent is 50 yuan, and the sales agent at the provincial level is 70 yuan, because the dealer will need to pay a high rent for the opening of the franchised store, as well as the wages of several guides in each store.

They buy shoes wholesale at 70 yuan, the average retail price should be 4 times that of the customers, and they will be sold to customers for about three hundred yuan, so they will be able to earn money.

I think the cost of a pair of shoes is only a few dozen yuan, so it is unreasonable to sell so much.

The subsequent pformation is based on the high price of goods.

The dealer's fixed retail price is too high to sell, and the goods that are not sold will be returned to the provincial branch.

In this way, the branch will also say that I can not sell, I do not have money, then these goods will be returned to headquarters.

If this is the case, we will not only have an industrial chain, but we will have no future.

Only selling to consumers is the real selling of goods.

So the retail price must be fixed by the company headquarters.

Considering that consumers like to buy our shoes series at 79 yuan, I have to control the cost of shoe making to around 35 yuan.

This is what we believe in: consumer centred.

A dealer opened 30 stores in Dadong.

In the late 90s of last century, Wenzhou shoe giants such as AOKANG and Kangnai took the lead in opening chain stores.

Around 2008, it was the peak period for the development of footwear brands in Wenzhou. AOKANG,

Kangnai, spider king, and Er Kang store all over the country.

At this time, Dadong encountered an unprecedented marketing dilemma. A reform began, and the new business model came into being.

Reporter: what was your market situation then?

Chen: at that time, every branch and agent of our company could not manage quickly, and still owed me about ten million.

What to do? We must force ourselves to pform.

In 2008, I bought the branches, but the stores were still there.

So I opened the store, and I decided all the products were priced.

Whether they are dealers or agents, they only need money to make money, so they listen to me.

Borrowing their stores to sell my own goods, I am responsible for making them earn money.

No matter how much we sell, we break the sales by 46, and this obstacle is gradually cleared.

Reporter: how do you distribute revenue from these distributors, agents and stores?

Chen: partnership business, companies accounted for 51%, they accounted for 49%.

So what if they lose their shares? I said they would protect you. If they lose, they will count me; and even if they do not earn money, I will give you 10% interest.

This solves the profit distribution among companies, agents and distributors.

At present, we have annual revenue of 100 thousand to 150 thousand per store.

The largest number of customers opened 30 stores (such a small number of customers), and opened more than 10 stores.

10 customers from a store can earn 12 million a year.

At the same time, we also reward, as long as the top five, there are Awards: some reward cash, some reward go abroad.

Reporter: how to deal with partners and suppliers?

Chen: correctly allocate profits, give partners and suppliers enough profits.

What are our standards? Jerry building is not acceptable, but we do not accept excess production and excess quality.

For example, if our big East's positioning is TOYOTA, then after the product is made, there will be a lot of Mercedes Benz cars.

Our position is TOYOTA, we must do a good job of TOYOTA's raw material supply.

Through the reform, the intermediate links of sales have been removed, the retail price of Dadong women's shoes has been greatly reduced, sales volume has increased greatly, the cost of shoemaking has also been reduced, and the capital chain has been revitalized, thus greatly improving the turnover rate of funds.

In 2013, the turnover rate of Wenzhou shoe enterprises was only two or three times a year. At that time, the capital turnover rate of Dadong had reached five or six times.

To put it simply, suppose that 100 million yuan of funds can be traded two or three times a year, which can make two hundred million or three hundred million yuan business. If the turnover is five or six times a year, it can do five hundred million or six hundred million yuan business.

Reporter: what is the effect of the reform?

Chen: at that time, the reform was to reform the branches and stores, and to "sell the wine and release the military power" to the agents, that is, "self pformation" and "joint pformation".

After the reform, the sales volume increased and the scale effect appeared.

The scale is large, the cost is reduced, the original cost budget is 40 yuan, and then more than 30 yuan is settled.

Reporter: how to evaluate that reform?

Chen: This is a very correct choice. If we do not reform, Dadong will not be able to go now.

At that time, we had cash flow, business flow and logistics. Besides, information flow helped us a lot.

The ERP system, the computer network, every store in the country sells several pairs of shoes every day, what shoes and how much money they sell. I am clear at the headquarters in Wenzhou.

If ten years earlier, these information can not be mastered in time.

After networking, it is very convenient for the company to receive money. For example, before the time of the night, it is necessary to call the store's day's money directly to the designated account of the headquarters.

This has speeded up our capital turnover.

In contrast, other enterprises that do not do so, their dealers' funds are first given to agents and then remitted to the company by agents.

And in the hands of agents, it is necessary to assume the risk of embezzlement of funds by agents.

Stock is a heavy burden on shoes and clothing enterprises.

There is a lot of stock, a profit from a dilutive enterprise, and two let the fast fashion products of shoes and clothing depreciate. "How can the clothes and shoes be sold in winter?"

Reporter: selling shoes, achieving zero inventory every quarter, it is very difficult to achieve this.

Chen: after realizing the national joint venture in 2012, our quarterly products basically realized "zero inventory".

"Every season can not sell shoes, send to send out!" how to send? In the store to do "buy 1 pairs to send 1 pairs", "79 yuan 2 pairs" and other promotional activities.

But the most important thing is actually the price we set at the beginning, followed by the problem of stock handling.

When clearing the warehouse, whether it is 19 yuan, 20 yuan to sell, or buy one to give a hard plug to the customer, anyway, we have to deal with it.

The "14 day fast fashion" of Dadong women's shoes "R & D, design, production, logistics and sales" has already been the leading shoe and garment enterprise in China.

And the goal of Dadong is more than that.

Reporter: Dadong women's shoes sell from design, production to exclusive stores, the whole process takes only 14 days?

Chen: general enterprises are still in the "speed limit 60 yards" stage of the provincial road; our "14 day fast fashion" is equivalent to the upper speed; after that, the "7 day fast fashion" is the high speed rail.

At present, our product needs half a month from the design to the store, which is 14 days to complete, but I am not satisfied.

We have been working hard to turn 14 days into 7 days.

We should use Mould Standardization and material standardization to get through all links.

There is a theory that, like General Company in the automotive industry, what they need to do is to turn the more than 6000 molds into 60 tools, which can be directly matched through centralized combination.

In fact, we have been developing such standard parts, but we have not yet achieved them.

This is like hot pot, first of all, we should create a fashionable bottom.

If it was too much trouble to cook a dish, the hot pot would just have to make this fashionable pot bottom. When the latest information in the industry arrived, we would officially start cooking.

If we build the "7 day fast fashion" in the future, we need to create all kinds of "fashion pot bottom".

How fast and delicious is the pot like the hot pot in Chengdu?

You can't do this kind of pot bottom? This means that whether you cook food or do business, you need a precipitation process.

Reporter: this "bottom of the pot", for Da Dong, how to do it concretely?

Chen: for our big east, in fact, a product category can create a "bottom of the pot".

For example, to make a pointed high fashion high heel shoe, we only need to make sure that the shoe last standard is good. Once we find that some new high-end shoes will be popular in the market, we can directly graft their fabrics or designs according to the new styles, which are supplied by the latest cheap and standard materials supplied by our suppliers. Otherwise, it will take us two or three months to design a new shoe.

Selling shoes is the same as selling seafood.

Two years ago, Dadong began to test water intelligent logistics, and the sorting process in logistics distribution realized the whole field unmanned and intelligent, similar to Jingdong's intelligent logistics warehouse.

At present, Dadong is building an intelligent logistics warehouse with a height of 34 meters and an area of 14000 square meters.

Chen Guangmin said it would be

The first intelligent logistics system of "one warehouse with the whole country".

Reporter: how to create "7 days fast fashion"?

Chen: Why did I not invest in other projects, only to invest in this industry chain? The ultimate goal is to create "7 days fast fashion".

For a brand with low price, the biggest cost is not the cost of raw materials, but the cost of time and plan.

For example, every store will always encounter such a situation: shoes that are well sold are not sold enough to sell.

There's a lot left.

So shoes that sell well become the biggest demand of stores, and we are the ones who provide them.

However, a lot of time is wasted from the demand from stores to our production and delivery to stores.

If the logistics needs to wait for another month, the day lily will be cold.

The shoemaking industry has the same timeliness as selling seafood: once the logistics is late, the products are useless, and the shoes that could have sold for 139 yuan could only be sold for 59 yuan.

We must overcome the difficulties encountered in the development from four aspects, namely, R & D, production, logistics and sales in four links.

Starting from the standard of the source, we should do well in the current "14 day fast fashion".

If goods can not be shipped out in time, it is meaningless to "hurry up".

Because "fast" is like the so-called barrel principle. Only when every short board is made "fast", can it really "fast".

This is the original intention of investment logistics.

In the future, when one of our "pot bottom" is very mature, we can really achieve "7 days fast fashion": two or three days production, 3 days pportation, and 7 days can arrive at the store.

Whether it is products, pricing or target consumer groups, Dadong uses the market positioning of low and medium positions, bases on the 456 line market, and uses the strategy of "encircling the cities by the countryside" to gradually move closer to the two or three tier cities.

In the past 8 years, the Dadong Gate store has grown rapidly from 1000 to more than 8000, and the scale effect has become increasingly prominent.

Reporter: how many stores and dealers are there in Dadong?

Chen: at present, there are hundreds of suppliers, more than 8000 franchisees and more than 3000 dealers.

The goods of these more than 8000 stores are all mine, and if I lose, I owe them all.

This mode is called "direct selling direct selling mode".

If franchisees work hard for us, and we do not earn enough money for him, then he may turn off our stores overnight.

So I have a lot of pressure.

Reporter: what did you do about the shoe supermarket (shoe supermarket) mode in the last two years?

Chen: why do we need to create shoes for super products, offering all kinds of products? Multi category is that we have women's shoes, leather goods, bags, men's shoes (starting in the second half of 2016, men's shoes) and children's shoes, and even in the future will have their own production oriented clothing.

Why do we have to make our own products? We need to discuss products with consumers better in the future Internet era, and make products that are in line with consumers' sense of fashion and comfort.

As for the concept of shoe super, I think "supermarket" means cheap price, which is also a positioning for us to brand.

Our shoes exceed the area between 150 and 200 square meters (and the average store area is only forty or fifty square meters). It has opened more than 1000 in the whole country. Next year, it will pform 3000 shoes and have more than 8000 single products.