Sold out of Africa, annual sales of 200 million, Shenzhen boss do fire this cooling products

“The world’s hottest day” is constantly being refreshed, the heat wave sweeping, sea and sky clouds steam. Vietnam’s high temperature to “power shortage”, residents soak into the river to cool down; Europe’s extreme weather is frequent, the Italians ride in the dark; China’s temperature records are frequently broken, Taobao cool products sold on …… hole shoes after a few years of popularity again, Fuzhou businessman selling 3 million yuan; Hunan “factory” factory in Africa, Shenzhen boss to do fire this cooling products. The “second generation of factories” in Hunan is expected to sell more than 40 million yuan of cool mats this year; Chinese businessmen are producing neck ice rings, ice-cold stickers and solar fans that are being sold globally through cross-border e-commerce.
This is one of the hottest summers ever in Vietnam, and one of the hardest. Located at 10°N latitude, Vietnam enters summer in May every year and temperatures can quickly soar above 38°C, and this year there was a record high temperature of 44°C. Coupled with an average annual humidity of 84%, Vietnam in summer has become a veritable “steamer”. This year, Vietnam suffered a “power shortage”, in May and June, the capital city of Hanoi, located in the northern part of Vietnam, was dark at night: not no street lights, but the government directly turned off some of the street lights in order to save electricity. The factories in industrial areas had rotating blackouts, workers followed the blackout schedule to work, large shopping malls with generators were crowded with people avoiding the summer heat, some stores closed down because of the blackout and the heat, local residents opened the doors and windows of their homes to ventilate, and orders from stores renting generators rose by 70%. The Vietnamese government chose to turn to China to buy electricity in Guangxi, and Vietnamese residents chose to turn to Chinese businesses to buy energy storage fans from China.
Also in June, an electrical appliance production plant in Shenzhen’s Baoan District, workers were busy, a solar charging during the day, lighting at night, but also for cell phone charging energy storage fan has become a hit. Founder Zhao Xiping was also surprised by this year’s demand: “Because of the production cycle and shipping cycle, it takes three months from the start of the fan’s production to officially land sales in overseas markets. September to May is the busiest time of the year for the factory. In previous years, in June, large quantities of goods are basically finished, followed by replenishment of some scattered orders. This year, because of the outbreak of the Southeast Asian market, in June, we are still shipping to Vietnam, the sales volume than the same period last year skyrocketed several times, the work schedule to the end of August.” In 2014, Zhao Xiping started making electric fans with his business partner. Originally, he positioned his products in the middle and high end, mainly for Japan, South Korea, Europe and the United States sales. Unexpectedly, because of the demand of overseas customers, he sold fans to Africa, Southeast Asia and South America, cooling demand, and now his company’s annual sales of 200 million yuan.
1. From Europe and the United States to Africa
In 2014, after several years of motor business, Zhao Xiping and his companion hit it off and decided to start a business together. While they were doing the motor business, they applied this technology to fans, and developed fans that were quieter, more energy efficient, and had a longer service life. “At that time, there were almost no domestic manufacturers doing this kind of fan, and we were the front-runner in the industry.” Talking about the first fan products, Zhao Xiping’s tone is still proud. Nearly ten years later, this fan product is still on sale. But due to the development costs and selling price is two times the traditional fan, as well as market recognition is not high, the sales of this product is not good, “2014-2015, only sold nearly 20,000 units.”
So, Zhao Xiping developed a second fan, designed on the basis of the first fan, energy storage fan, so that the fan can work as usual when not connected to the power supply. The price of the second fan was 4-5 times higher than that of the traditional fan, and although sales rose slightly, the overall situation remained poor. Zhao Xiping also found the problem, “Our target is the high-end market, but the high-end consumer demand for fans is not large. 2014-2015, we lost nearly 10 million yuan overall”. In order to find a breakthrough, Zhao Xiping began to research the global market. He found that many customers in Africa, South America and Southeast Asia had the same problem – lack of electricity.
These economically underdeveloped areas of the infrastructure is not perfect, often the problem of power shortages, even the most economically developed South Africa in Africa are often blackouts. Xu Ruo, who works in Stellenbosch, South Africa, experiences power outages every day, “We live in the city center, a former colonial settlement, which is equivalent to a rich area, office areas and restaurants will always have generators. The poor can’t afford generators or the diesel fuel they need.”
Looking out from the center of Stellenbosch, not far away is the hillside ghetto. The gap between rich and poor is visible to the naked eye on the highway to Cape Town – villas and apartments are packed with densely packed bungalows made of tin a few dozen meters apart. For productivity and economic reasons, most residents in these areas also do not have air conditioning in their homes. In summer, the residents mainly rely on fans to cool down.
In summer, residents mainly rely on fans to beat the heat, and there is a great demand for fans. Zhao Xiping did research and development for these customers. He added a solar panel to the fan, which “can be used to charge it when there is no electricity, and when there is electricity, it can also be charged by the power supply of the house”.
His factory, which is in the motor business itself, has also been updating its technology over the years. Motors that used to cost more than $50 have been pared down to under $30 or even less thanks to their efforts. “For our fan products, we produce almost all the spare parts ourselves, and have brought down the cost one after another.” Zhao Xiping somewhat helpless, “the traditional fan, many factories can sell hundreds of thousands of units or even one or two million units a year. We only sold 20,000 units in the first year.” But it is because of this new production line, so that Zhao Xiping’s business slowly grow, from “three years of losses of ten million yuan”, to today’s annual sales of 200 million yuan.
2.Three Tudor engineering students, find the Chinese boss
In order to open up sales, around 2015, Zhao Xiping did online business, but also in 2017 stationed in Alibaba International Station. Zhao Xiping and the company staff have little experience in online operations. In the first two years, “I saw the money spent out, but I didn’t see any orders coming back.” Zhao Xiping almost gave up, but then he thought, “the annual sales of 20,000 units did not beat me, may as well try again”. So, Zhao Xiping recruited a professional online e-commerce team, and is responsible for the reception of the customer’s business team division of labor, slowly online business up. It was at this time that they received a special order.
A few years ago, three Imperial College London students traveled to Africa, in order to experience in-depth, they lived in a local village. There was no electricity in the village, and at night it was pitch black, so the residents could only use fire for lighting, and in the face of high summer temperatures, they could only endure. During their stay, the three students witnessed a fire in the next village. The lack of electricity and water made it extremely inconvenient to rescue the villagers, who were awakened from their sleep, but some people were still buried in the fire. Before the sun rose in the sky, yesterday’s homes were engulfed in flames and in ruins.
Most of the people from the next village had died in the fire. The fire shook the three students and made them decide to raise money together to start a business that would bring non-rechargeable lighting to countries where electricity is scarce, making the nights safer and allowing local children to study at night. The company founded by the three students saw Zhao Xiping’s product online and found him through Alibaba International, hoping he could create a fan suitable for use in the African slums, and also put forward the need for more functionality.
Touched by this story, Zhao Xiping began to think about how to meet their needs while lowering the cost and making the fan affordable for local Africans after receiving the order. After discussing with the R&D team, Zhao added a light and a USB (Universal Serial Bus) interface to the fan. In order to save costs, they removed the “wind power level”, “timing” and other functions, and only retained the basic “lighting”, “charging” and “feeding”. “Nowadays, many Africans have cell phones, and with the USB port, the fan can charge the cell phone when there is no power. A day of light can make the fan fully charged, if you simply use the fan function, after a full charge can be used for 40 hours”.
In order to minimize the cost of the fan, Zhao Xiping also set up a special R & D team, “This is also for quality control, can not be sloppy in quality.” The product has been recognized by customers and has allowed Zhao Xiping to open up new sales channels. The company of three Imperial College London students was given the opportunity to work with the UN’s World Bank. Now, they place orders for more than 100,000 fans with Zhao Xiping every year.
3. Don’t do business in the wind
Most of Zhao Xiping’s fans are sold to economically underdeveloped regions. He counted the orders, Africa accounted for 30%, South America accounted for 20%, Southeast Asia accounted for 30%, “there are a small number of sales to North America and Europe. This summer, the world’s many countries have extreme hot weather, Zhao Xiping’s fan and sold out, “Thailand, Vietnam, the Philippines customers have come to grab the order, part of Africa’s demand for countries have increased a lot more than in previous years”. According to Alibaba International Station data show that from March to May this year, the demand for fans from overseas buyers increased by more than 30% year-on-year. With the rising temperatures, in June, the platform fan demand in May on the basis of high growth, once again increased by 30% year-on-year.
But Zhao Xiping did not go to grab the “wind mouth”, and do not make quick money. His business is getting bigger and bigger, the annual investment in research and development funds are also more and more, “R & D costs basically accounted for 10% -15% of annual sales. We are developing new products every year, this year we developed three or four new products, and will do customized products according to customer demand.” “You can’t grab the ‘windfall’, and even if you do, you’ll return it in the end.” Nearly ten years of entrepreneurship, Zhao Xiping has seen too many changes in the industry, from the beginning of the “very bold”, into the current “very cautious”, “professional people stay in the industry, want to make a quick buck have been gone! “.
This year, Vietnam’s “power shortage”, Zhao Xiping lamented that a number of businesses may be eliminated, “Vietnam’s demand is particularly large, some originally do not do the fan business also entered the game. Usually sell 100 yuan, 150 yuan of a fan, some manufacturers increase the price to 300 yuan, customers are willing to pay, because the goods to Vietnam can be sold to 600 yuan or even 700 yuan. But in the view of Zhao Xiping, like Vietnam, “power shortage” as a sudden demand, will not last too long. He also did not blindly expand production, only to take the factory’s ability to orders, but also advised friends around not easily to go to the heat, to do their own professional thing is the hard way.
With the Vietnamese government and Guangxi reached an agreement on power supply, and from the neighboring Laos to buy a lot of electricity, Vietnamese residents of the solar fan demand is really a lot less. Many manufacturers blindly expanding production products into inventory, piled up in the warehouse can not be sold. Some manufacturers of blind entry, but also let the products sold to Vietnam mixed. Zhao Xiping, a Vietnamese customer told him that he had previously purchased a number of solar fans, but after the arrival of the warehouse directly into the inventory – manufacturers sent over the prototype and the actual arrival of product quality is not the same, he did not dare to sell in Vietnam, for fear of smashing the signboard.
“For customers in underdeveloped areas, buying a fan may be the same as we bought a color TV twenty years ago, not too expensive, not too cheap. But we would want him to use it for a longer time, for three, five or even ten years.” Zhao Xiping understands, in the eyes of the Chinese common to no longer common fan, for customers in underdeveloped areas is a price is not cheap “big appliances”, hard quality in order to open up sales. A fan wants to mass production, in addition to the common mold, at least five sets of molds need to body, buttons, etc., and Zhao Xiping in the molds will spend more than 300,000 yuan, almost double the counterparts, “to ensure that the life of the molds can be used more than 500,000 times, the ordinary falls, bumps are not easy to damage”.
“The earliest one, we are still selling it. There was a customer from Thailand who ordered that fan, and ten years have passed, and he found us two days ago and said the fan still works.” Today, Zhao Xiping’s company has reached 200 million yuan in annual sales, of which more than 100 million yuan is for fans, of which 70 percent of the orders are online and the repurchase rate has reached 70 percent. In two months, Zhao Xiping and the factory will enter a busy phase again, they are about to produce the next year’s fans, in the next year to continue to send people in Southeast Asia, Africa and South America cool.

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