Author| A Dolphin
On the evening of June 6, some netizens took a video to break the news that the seven-degree space sanitary napkin found needles, causing an uproar.
Statements such as “scary”, “don’t dare to buy it in the future”, “this is the end of it” have pushed the seven-dimensional space to the forefront. That night, “Seven Degrees Space Space7” issued an announcement on Weibo apologizing and saying: “Attach great importance to it, expedite the investigation!” After the investigation is clear, the results of the investigation will be announced as soon as possible. ”
Public opinion is two-way. While waiting for the results of the investigation, some netizens questioned, “There is something strange”, “There should be no needle on the production line”, “It may be a supermarket problem”, “Is it a prank?” “, “Could it be that I bought a fake” and so on.
On June 8, the parties spoke again: “The manufacturer confirmed that it is genuine.” As of press time, the results of the investigation into the “Seven Degrees Space Sanitary Napkin Needle” incident have not yet been released.
As a domestic sanitary napkin brand, Seven Degrees Space stood out among the “foreign goods” and captured the hearts of popular women, and Xu Lianjie, the founder of the parent company “Hengan Group” behind it, was also known as the “father of Chinese sanitary napkins” for opening up the domestic sanitary napkin market in China.
“Hengan” went public, setting four “firsts”
Xu Lianjie, born in 1953, lived in an era that was not very peaceful.
In order to get rid of hunger and poverty, he devoted himself to making money when he was young, and later he was labeled “capitalism” and fell into “difficulties”, but the idea of business never wavered in his heart.
1979, the first year of China’s reform and opening up. Xu Lianjie realized that the time to make money had come. After that, he set up a transportation team, set up a garment factory, and even opened the first zipper factory in Jinjiang, Quanzhou, Fujian, and made a name for himself and harvested the first pot of gold.
Opportunity hit Xu Lianjie again in 1984, when he came into contact with sanitary napkins from Hong Kong. At that time, China’s feminine sanitary napkin market was still blank, and in his words, “my wife had never seen it.”
The impact of sanitary napkins on him was enormous. After tossing and turning late at night, he made a bold decision to give up clothing and zipper factories and switch to sanitary napkins. Because Xu Lianjie believes that the market can be created. This is also the driving force for him to abandon his old business and start exploring the “Chinese sanitary napkin” market again.
In 1985, “Heng’an” was born in Fujian. However, it is difficult to do easily. Sanitary napkins, such as “imported products”, were not accepted, and the products could not be sold. Hengan was crumbling, and his salary was almost impossible to pay.
Xu Lianjie, who is under great pressure, can only improve the quality and brand promotion to make the audience accept “sanitary napkins”. After working hard for more than 1 year, sanitary napkins have captured more and more female consumers with their convenience and novel comfort experience.
Hengan “fired”. Dealers rushed to take cash to order, and there was always a long queue in front of the Hengan factory at that time. In 1992, Heng’an’s “Anle” sanitary napkin won more than 40% of the market share, becoming the first in the industry.
However, there is a law in the Chinese market, that is, “today this product is on fire, tomorrow it is being produced everywhere”. After sanitary napkins were accepted by the public, the market expanded day by day, and competitors continued to enter the market.
In less than 2 years, Hengan encountered a bottleneck and sales revenue did not grow. In 1997, in order to break through Hengan to develop new business, enter the household paper industry, and set up “Hengan Paper”, but the total annual sales did not improve much.
Xu Lianjie realized that “family business” was a drawback that dragged down Hengan. But the family bond is difficult to resolve, and going public has found a way out for him. He once said: “At that time, listing was not for financing, but for the company’s standardization, in accordance with the management and operation rules of listed companies.” ”
At the end of 1998, “Hengan International” was listed in Hong Kong, not only unaffected by the 1997 financial crisis, but also won the highest price-earnings ratio and subscription multiple of Hong Kong stocks listed at that time, breaking the four firsts.
Enterprise innovation to achieve the goal of 10 billion
The benefits brought by quoting the management rules of listed enterprises are quite significant, which further strengthens Xu Lianjie’s need for “enterprise reform”. “The right thing must be done”, this is Xu Lianjie’s law of life. As a result, Hengan embarked on the road of “never stop innovating”.
But correcting the ills of family businesses is bound to be opposed by shareholders and family members. Xu Lianjie understood that it was ineffective to push by himself.
In 2001, Hengan spent 10 million US dollars to start the first round of change, hired a well-known management consulting company to enter the enterprise, and carried out the “TCT action”. What Xu Lianjie wants to do is to rely on the hands of “consulting companies” to carry out comprehensive deepening reform and complete the transformation of family enterprises into modern enterprises.
The entry of consulting firms has not been smooth sailing. To this end, the company promised that the reform could achieve the goal of “reaching 5 billion in five years”, which suppressed some internal opposition.
The results have proven to be remarkable. Heng’an’s internal family personnel have plummeted and new talents have been introduced. In 6 years, sales revenue and profit both increased. In 2007, Hengan achieved the goal of sales of 5 billion yuan.
In 2008, the financial crisis swept again. Hengan started the second round of change at a critical moment. Optimized supply chain and enterprise control, and significantly reduced logistics and transportation expenses in the year. Coincidentally, the following year, Hengan achieved an output value of 10.8 billion yuan.
In the past 8 years, Heng’an ace sanitary napkin “Anerle” has achieved a gorgeous turn, and the more high-end “Seven Degrees Space” sanitary napkin series has caused market trends as soon as it came out; At the same time, during the financial crisis, it expanded its papermaking business against the trend, reaching an average annual papermaking scale of 600,000 tons in two years, and its toilet paper “Xinxiangyin” became the first brand in China’s household paper industry; Not only that, Hengan also acquired daily chemical companies and snack food companies “Qinqin”.
Hengan territory is constantly expanding, but this is all around the core business in circles. In the face of the fiery “outlet” in various periods, Hengan maintained enough calm. Xu Lianjie once said; The “wind” of the vent is gusts after gusts, as soon as the wind stops, the “pig” cannot fly, only wings are the core competitiveness of the enterprise.
However, although the growth of scale has gradually turned Hengan into a behemoth, it has also brought new problems.
Xu Lianjie saw that Hengan was becoming “very slow” because the company was large, there were many layers and the process was complex, and it was difficult for the group to respond quickly to the market. Employees submit a report, which needs to go through layers of approval before it reaches the executive.
In 2014, Hengan implemented the third round of management reform. Xu Lianjie relies on big data to transform Hengan from a modern enterprise to a refined enterprise, build an “end-to-end” information operation platform, and implement platform-based small team operation.
The three reforms have allowed Hengan to walk steadily in the unpredictable market. In 2020, Hengan Group’s operating income has reached the threshold of 20 billion yuan, reaching 22.374 billion yuan, the overall gross profit increased by 8.8% to 9.456 billion yuan, and the operating profit increased by 12.5% to 6.392 billion yuan. This year, Xu Lianjie’s net worth reached 17 billion yuan.
On the big ship of “Heng’an”, Xu Lianjie has been in charge of the “rudder” for nearly 36 years, allowing Hengan to avoid the reef of two “financial crises”, and waved the banner of reform to complete three “accelerated advances”. Now, 68-year-old Xu Lianjie is about to “quit”.
On May 17, 2021, Hengan International Group officially announced that Xu Lianjie, the co-founder of the group, will resign as president of Hengan and will be succeeded by his eldest son Xu Qingliu for an initial term of three years.
According to the data, Xu Qingliu, 41, is a Master of Science in Finance from the University of London, UK, and has been responsible for the company’s development, operation, management and investment since joining Hengan’s “Qinqin Group” in 2003. After 18 years, Xu Qingliu has accumulated rich experience in enterprise management.
Whether Hengan will continue to move forward in a straight line or turn in place is a development that is difficult for shareholders to predict. And how Hengan handled the “sanitary napkin negative incident” is the first big test Xu Qingliu has accepted since he “took over the baton”.