Born in 1967 in Nanjing, capital city of Jiangsu province, Chen Yixi met his best friends and business partners, Li Wei and Miu Bingwen, in Nanjing Normal University in 1985. During the university time the three young guys shared the same passion in reading, and also shared the same values – life is too short to waste. After graduating, Chen gave up his steady job with the Jiangsu propaganda department and co-founded Hongguo International, a womens shoe manufacturer, with his two best friends in 1995.
He’d studied the shoe industry for two years and discovered that although China produced 60% of the world’s shoes (6 billion pairs per year), it barely had a brand. He created his own, C. banner, meaning China’s banner, and focused on the mid to high-end market, targeting white collar ladies who are able to spend a third of their monthly salary on a pair of shoes. Initially Chen had to play the roles of boss, designer, salesman and delivery man at the same time. “If someone agreed to put our shoes on their counter I was so grateful that I wanted to kneel down,” he recalls of the early days lobbying department stores. To remember tougher days, Chen still keeps the plastic bags holding the shoes that he carried as a salesman. One year later, C.banner shoes entered 700 stores nationwide. By the end of 2002 the sales of C.banner shoes reached Rmb 600 million. In 2003 Hongguo International ranked third in local market shares, and was listed on the Singapore Stock Exchange raising Rmb100 million.
To attract trendy younger women Hongguo launched another brand EBlan in 2004. In 2007 he formed a JV with US footwear company Brown Shoes, holding a 49% stake, operating brands Naturalizer and Via Spiga in China. His factories in Nanjing and Dongguan can make 2.7 million pairs of shoes per year under C.Banner and EBlan brands, selling in more than 1,300 boutiques and outlets across China. It also makes shoes for international brands such as Nine West. Hongguo International diversified into book retailing in 2003, and soon created a brand – Popular Bookmall – also selling CDs, DVDs, online games, sports items. The stores also offered coffee and tea, plus free lectures. His aim was to create a cultural mall.
Need to know
Impacted by inflation and flagging international markets, Hongguo international reported revenue of Rmb1.1 billion in 2009 with net profit of Rmb79.5 million, down 25% year-on-year. It delisted from Singapore’s exchange last May, but now plans an IPO in Hong Kong later this month, seeking about $300 million.
He loves reading and spends Rmb100,000 purchasing books for his employees every year. One of the rules in Hongguo is that top executives have to finish 48 books every year, middle management 24, and other staff at least 12.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.