Founder of Galanz Electric

Liang Qingde was born in 1937 in Shunde in Guangdong. He began his career in a local printing plant, before resigning in 1978 to set up his own business where he made dusters from chicken and duck feathers. He soon twigged that there was a big foreign market for down feathers and made his first fortune with the Guizhou Eider Down Factory.

Big break

Liang realised that the market for down was becoming saturated and in September 1992 started Galanz Electric. He’d conducted a nationwide survey and hit on the idea of making microwave ovens. He signed a technical cooperation agreement with Toshiba and spent $4 million to introduce an advanced automatic production line. He produced his first oven within two months and by the end of 1994 had sold over 100,000 units. Via a massive marketing and PR campaign in 1995 he made Galanz the market leader.

Down but not out

To raise funds, Liang sold his eiderdown firm for Rmb80 million. He then launched a massive price-cutting strategy, lopping 40% off microwave sticker prices. By 1996 he’d achieved a 53.2% market share in China. His policy from then on became: cut the price, win market share, reduce costs, and then cut prices further. This earned him the nickname ‘The Price Butcher’.

Global dominance

When his South Korean competitors were hamstrung by the Asian financial crisis, Liang decided to capture US market share. He spent $20 million on an American R&D facility and headhunted local professionals. He expanded the range of microwaves he sold in the US and Europe. He also followed an OEM strategy where he persuaded foreign manufacturers that he could produce for them at a third of the cost. He’d soon brokered deals with 200 foreign firms and expanded his production capacity. To avoid antitrust issues he decided to cap his own-brand exports at 50% of his capacity and use the remaining half to produce for the likes of Panasonic.

Need to know

Among the tens of thousands of manufacturers in China, Galanz occupies a unique position: it has a 70% domestic market share and a 50% global market share. On his strategy of cooperating with foreign brands he says: “They use our labour and large scale production and we use their brand and marketing channels.” This has helped, he adds, to “form a protection barrier of mutual inclusion” which has aided Galanz’s growth.

Net worth

Liang has total assets of Rmb12.5 billion, ranking 55 on the Hurun Rich List.

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