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Big profits from the baby business

Updated: 2012-07-17 10:53
By He Wei in Shanghai (China Daily)
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Big profits from the baby business

A consumer looks at Goodbaby strollers in a department store in Nanjing, Jiangsu province, March 29, 2012. [Zhen Huai/Asianewsphoto]

Like so many successful innovators, Song Zhenghuan said he never set out to be an entrepreneur.

But his role as the vice-principal of a school in Kunshan - the county-level city where he was born and raised - came with some unexpected duties that landed him the opportunity to steer his way in the direction of running the baby products giant.

A quarter of a century ago, when the Chinese economy was first starting out on its road to a market economy, Song's school was on a pilot program to help it create businesses to fund itself.

He and his fellow teachers borrowed money to open a factory making metal products.

His initial successes were countered by major setbacks, especially one he remembers making microwave ovens for a Shanghai-based company.

But Song was determined to turn around the fortunes of the school's fledgling production lines to compensate for hefty losses by his fellow investing co-workers.

In 1989, thanks to a student's father, Song won a contract to make parts for strollers.

With no experience whatsoever, he learned from scratch.

He studied how people sit in chairs, sat in libraries day and night, and looked at designs he managed to get from a nearby chair factory.

Finally, he struggled to bend a shabby chair in shape - or what he thought it should be - and brought it to the office.

When a colleague saw it, he asked what it was, let alone whether it was a baby stroller.

"But what if I add wheels, and made the wheels such, that if they could be folded in, the stroller could be used as a rocker as well?" he remembers thinking.

Song's masterpiece became a star overnight and soon dominated the then domestic market.

It took him just a year to pay off the start-up debt - a reflection of just what a hit the stroller was.

His "rocker-stroller" not only won Song a national patent award but also underlined to him the importance of designing finished products and owning brands.

To meet growing demand, the company invested heavily in specially made equipment from Shanghai to handle the growing orders, as it developed its niche.

Meanwhile the company took part in national industry fairs across the country and distributed large, colorful posters, showing a cute baby clapping hands on the stroller.

Such an upbeat, high-profile image was "a very rare occurrence two decades ago", he said, when Chinese businesses still tended to err on the modest, with most advertisements offered little more than a thank-you note and a telephone number.

Going back to his much-used formula of innovation and marketing, always being key, he added: "You must have hit products, and at the same time they must be eye-catching.

"You cannot succeed without these," he remembers drumming into his 20-strong team at the time.

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